TMI Blog2015 (8) TMI 1329X X X X Extracts X X X X X X X X Extracts X X X X ..... xported or that goods exported cannot be correlated with goods cleared from the factory. If the ARE-1 is not produced, it cannot also be established that the goods are the same on which duty is debited in the bond account, i.e., the duty paid character of the goods also cannot be established. The submission of application for removal of export goods in ARE-1 form is must because such leniencies lead to possible fraud of claim an alternatively available benefit which may lead to additional/double benefits. The Hon’ble High Court of Allahabad in the case of M/s. Vee Excel Drugs and Pharmaceuticals Pvt. Ltd. v. Union of India [2014 (1) TMI 1340 - ALLAHABAD HIGH COURT] has dealt with the issue of permissibility of availment of export benefit when ARE-1 not filed. It has held that ARE-1 application is the basic essential document for export. Filing of ARE-1 having been specifically contemplated under notification issued under Rule 18 ibid, same was mandatory and not directory. Therefore, lapse in filing of ARE-1 was held as non-condonable. The ratio of this decision is squarely applicable to clearances made for export without payment of duty under Rule 19 ibid - when the applicant se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AL/DC/2011, dated 17-3-2011 passed by the Deputy Commissioner, Central Excise, Jalandhar. 2. Brief facts of the case are that applicant holding Central Excise registration were engaged in the manufacture of hand tools falling under Chapter 82 of Central Excise Tariff. On scrutiny of ER-3 returns of the applicant for the quarters ending June, 2009 and September, 2009 it was observed that during this period the applicant had cleared excisable goods, i.e., hand tools valued at ₹ 38,30,216/- for export and in these returns, the applicant had mentioned Export against H-Form or Export Sale . However, on further scrutiny, it was observed that the applicant had not followed export procedure as detailed in Rule 19 of Central Excise Rules, 2002 and Notification No. 42/2001-C.E. (N.T.), dated 26-6-2001 as amended and had violated the provisions of Rule 19 of the Central Excise Rules, 2002 and Notification No. 42/2001-C.E. (N.T.), dated 26-6-2001 as amended. Though the applicant had executed bond but neither any ARE-1 nor proof of export in respect of above clearances was filed with the proper officer, which was the statutory requirement as provided under Rule 19 of the Central Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... export procedure for exempted units wherein at serial No. 4 certain documents shall be accepted as proof of export. The circular as well as supplementary instructions are binding upon the department. Reliance is placed upon judgments in the cases of State of Kerala v. Kurian Abraham Pvt. Ltd. - 2008 (224) E.L.T. 354 (S.C.) = 2009 (16) S.T.R. 210 (S.C.), Union of India v. Arviva Industries (I) Limited - 2007 (209) E.L.T. 5 (S.C.) = 2008 (10) S.T.R. 534 (S.C.), Paper Products Ltd. v. Commissioner of Central Excise - 1999 (112) E.L.T. 765 (S.C.) and Cosmonaut Chemicals v. Union of India - 2009 (233) E.L.T. 46 (Guj.). 4.7 That there is no loss of revenue and it is not a case where the appellant has cleared the goods for home consumption. 4.8 That the appellant was new in the field and was not aware that copies of Form- H duly attested are to be submitted with the department within the stipulated time. Reliance is placed upon the Hon ble Supreme Court of India decision in the case of Motilal Padampat Sugar Mills Co. Ltd. v. State of U.P. - (1979) 44 STC 42. 4.9 That it is well-settled by now that any procedural defect cannot take away the substantive right of the appellant. At ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayment of duty and duty was held to be recoverable under Section 11A of the Central Excise Act, 1944 along with interest by the original authority. Penalty was also imposed under Rule 25 of the Central Excise Rules, 2002. The impugned Order-in-Original was upheld by the Commissioner (Appeals). Now the applicant has filed the revision application on grounds stated in Para 4 above. 8. Government notes that in the present case, it is an undisputed fact that the applicant, a unit registered with Central Excise, availed benefit of duty free clearances for the purpose of export but failed to fulfill the conditions and did not follow the prescribed procedure thereof. In the quarterly ER-3 returns, the impugned excisable goods were shown as cleared for export with remarks against the said sales as Export against H Form or Export Sale . They neither paid duty on these goods nor did they comply with the provisions of Notification No. 42/2001-C.E. (N.T.), dated 26-6-2001 under Rule 19 ibid. Though they executed a bond, they failed to file ARE-1 with proper officer and also failed to submit proof of export of goods in question. 9. In reference to the above, Government first proceeds t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction in case of any discrepancy. 9.1.5 In case of non-export within six months from the date of clearance for export or any discrepancy, the exporter shall himself deposit the duty along with interest. Otherwise, necessary action can be initiated to recover excise duties along with interest and penalty. 9.1.6 A separate procedure has been laid down for declarant units, i.e., those units who are within exemption limit based on value of clearance and are not registered with Central Excise. The requirements include obtaining of declarant code no. in terms of Notification No. 36/2005-C.E. (N.T.), dated 26-6-2001, use of pre-authenticated invoices bearing printed serial number, declarant code no., progressive total of clearances, EXIM code, etc.; filing prescribed quarterly statement; submitting proof of export to Range Officer within six months from date of clearance from factory; proof of clearance in case of exports through merchant exporters including Form-H in case of goods exported directly from the unit. 9.2 In light of the above stated statutory provision, Government observes that any export clearance, intended to be made without payment of duty, will be subject to Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thout payment of duty under Rule 19 ibid. 9.3.3 It is a settled issue that benefit under a conditional notification cannot be extended in case of non-fulfillment of conditions and/or non-compliance of procedure prescribed therein as held by the Apex Court in the case of Government of India v. Indian Tobacco Association - 2005 (187) E.L.T. 162 (S.C.); Union of India v. Dharamendra Textile Processors - 2008 (231) E.L.T. 3 (S.C.). Also it is settled that a notification has to be treated as a part of the statute and it should be read along with the Act as held by in the case of Collector of Central Excise v. Parle Exports (P) Ltd. - 1988 (38) E.L.T. 741 (S.C.) and Orient Weaving Mills Pvt. Ltd. v. Union of India - 1978 (2) E.L.T. (J311) (S.C.) (Constitution Bench). 9.3.4 Government notes that the applicant relied on the various judgments regarding procedural relaxation on technical grounds. The point which needs to be emphasized is that when the applicant seeks rebate under Notification No. 42/2001-C.E. (N.T.), dated 26-6-2001, which prescribes compliance of certain conditions, the same cannot be ignored. While claiming the rebate under Rule 19 ibid, the applicant should have ens ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad with Notification No. 42/2001-C.E. (N.T.), dated 26-6-2001 and follow the procedure prescribed therein. As such it was always the intention of the applicant to be a registered unit otherwise they would have followed the declarant unit procedure as stated in para 9.1.6 above. There is nothing on record to show that due procedure for declarant units has been followed by them. As such, H-Form is not a valid document as proof of export in the case of the applicant and their contention in this regard is not tenable. 10. In view of above discussion, Government finds that the demand of duty along with interest will sustain. Also once contravention of relevant statutory provisions stands established, imposition of penalty will also sustain. The applicant have contested the imposition of penalty on the ground of non-mentioning of sub-clause of Rule 25 of Central Excise Rules, 2002 relying on the Hon ble Supreme Court of India ruling in the case of Amrit Foods v. Commissioner of Central Excise - 2005 (190) E.L.T. 433 (S.C.), in which it was observed that before imposing the penalty, it was necessary for the assessee to be put on notice as to the exact nature of contravention for which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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