AI Structured Summary
Not yet generated for this judgment
Judgment
S. Vaidyanathan, J—Challenging the order, dated 19.6.2006 passed by the first respondent in Order No. 487-488 of 2006, in and by which, the revision applications filed by the petitioner against the order passed by the Commissioner of Central Excise (Appeals), Coimbatore rejecting the rebate claims, came to be dismissed, the petitioner has come forward with the present writ petition.
The petitioner company is a Co-operative society functioning under the control of Government of Tamil Nadu and engaged in manufacture and sale of sugar, which is an excisable commodity. It appeared that the petitioner cleared 5000 sugar in 100 kgs bags on payment of duty of Rs. 42,50,000/- and Rs. 17,00,000/- under cover of invoice and the same were stored in M/s. Central Warehousing Corporation, Udumulpet. However, according to the petitioner, since the export market desired only 50 kg sugar packing in poly propylene gags, the petitioner, after obtaining permission from Maritime Commissioner of Tuticorin, the goods were exported through two merchant exports, viz., M/s. Lakshmi Export, Coimbatore and M/s. ISEC, Coimbatore. Since the duty paid goods were exported, the petitioner has filed applications for refund of duty of Rs.42,50,000/- and Rs.17,00,000/-. By orders, dated 5.5.2004 and 7.5.2004, the second respondent herein rejected the said applications. Aggrieved by the rejection of the applications, the petitioner preferred first appeals in Appeal Nos. 281-282 of 2004 before the Commissioner of Central Excise (Appeals), which were also rejected by him by order dated 13.9.2004. Aggrieved over the same, the petitioner filed two revision applications before the first respondent. By the impugned order, dated 19.6.2006, the said revision applications came to be rejected. Hence the writ petition.
Challenging the impugned order, dated 19.6.2006 passed by the first respondent, Mr.P.Ramamurthy, learned counsel appearing for the petitioner would contend that there is no dispute that the petitioner has paid the excise duty in respect of the exported sugar which was certified by the Customs Authorities and as per the Circular No. 294/10/1997-CE, dated 30.1.1997, the petitioner is entitled to the refund of the duty paid by the petitioner, however, though the petitioner produced satisfactory documentary evidence to show that re-packing of sugar into 50 kg bags was done at Tuticorin Port in the presence of customs officials, the respondents pointing out certain procedural infractions, ought not to have rejected the legitimate claim of the petitioner, which is a substantive benefit, in the interest of export promotion. In support of his contentions, the learned counsel relied upon a decision reported in 2006(205) ELT 1093 (GOI), wherein, it has been observed as under in para 8:
"8. Govt., has also gone through the Hon''ble Tribunals judgment in case of Synthetics & Chemicals Ltd., v. Collector of Central Excise, Allahabad -1998(93) ELT 92 (Tri), wherein it is held that a substantive benefit, if otherwise due could not be denied merely on account of minor procedural infractions." Similarly Hon''ble Supreme Court in case reported in Mangalore Chemicals and Fertilisers Ltd. Vs. Deputy Commissioner of Commercial Taxes and others, AIR 1992 SC 152 : (1993) 49 ECR 23 : (1991) 55 ELT 437 : (1992) 3 JT 482 : (1991) 2 SCALE 662 : (1992) 1 SCC 21 Supp : (1991) 3 SCR 336 : (1991) 83 STC 234 has held that "Distinction to be made between procedural condition of technical nature and a substantive condition-Non observation of Former condonable while that of the latter not condonable as likely to facilitate commission of fraud and introduce administrative inconveniences".
The learned counsel also relied upon a decision of the Supreme Court in Mangalore Chemicals and Fertilisers Ltd. Vs. Deputy Commissioner of Commercial Taxes and others, AIR 1992 SC 152 : (1993) 49 ECR 23 : (1991) 55 ELT 437 : (1992) 3 JT 482 : (1991) 2 SCALE 662 : (1992) 1 SCC 21 Supp : (1991) 3 SCR 336 : (1991) 83 STC 234 , wherein the Hon''ble Supreme Court has explained as to how exemption to be interpreted, in the following lines :
12...... It appears to us the true rule of construction of a provision as to exception is the one stated by this Court in Union of India and others Vs. M/s. Wood Papers Ltd. and another, AIR 1991 SC 2049 : (1991) 33 ECR 235 : (1990) 47 ELT 500 : (1991) 1 JT 151 : (1990) 4 SCC 256 : (1990) 2 SCR 659 : (1991) 83 STC 251 : (1990) 1 UJ 717 "..... Truly, speaking liberal and strict construction of an exemption provision are to be invoked at different stages of interpreting it. When the question is whether a subject falls in the notification or in the exemption clause then it being in nature of exception is to be construed strict and against the subject but once ambiguity or doubt about applicability is lifted and the subject falls in the notification then full play should be given to it and it calls for a wider and liberal construction....
(Emphasis supplied by their Lordships). [para 12]
The Government has carefully gone through the written and oral submissions along with cited judgments and also perused the orders passed by the lower authorities. It is the case of the respondents that the petitioner has not complied with the conditions and procedure of Notification No. 40/2001- CE(N.T) dated 26.06.2001 since the goods were not exported from the petitioner''s factory or from the warehouse duly approved and it had not followed the procedure as set out in the notification. The petitioner has not produced satisfactory documentary evidence to show that the goods under export actually suffered duty. It is noted that the goods have been exported through the merchant exporter under bond in terms of Rule 19 of the Central Excise Rules 2001 and exported through merchant exporation viz., ISVC via Tuticorin Port under Bond in terms of provisions of Rule 19 of Central Excise Rules 2001 and prepared ARE - 1 and other export documents and that the petitioner exported same goods subsequently through the merchant exporter which were earlier cleared on payment of Central Excise Duty from the place of production. It is also noted by the Government that the petitioner exported the goods after payment of Central Excise Duty directly from the place of manufacturer or warehouse in terms of Notification No. 41 dated 22.09.1994 and the quantity and number of bags of the goods given in the document, however there are no marks and numbers or identification marks of the goods which could prove that the petitioner exported the same goods which were cleared on payment of Central Excise Duty from the manufacturer''s place. It is further noted by the Government that the petitioner has not repacked the goods in 50 kgs bags from 100 kgs bags in supervision of any authorised agency.
It is no doubt true that the benefit envisaged by the notification No. 294/10/1997-CE, dated 30.1.1997 was in the nature of a concession to which any exporter is entitled however it is subject to the strict compliance with the conditions mentioned therein. On a perusal of the entire record as well as the impugned order passed by the authorities, this Court is the considered view that the impugned order does not suffer any illegality or irregularity in order to interfere with the same since as held by the authorities that the petitioner has not proved by adducing satisfactory documentary evidence that the goods cleared from the factory on payment of duty and the goods exported through the merchant exporter were one and the same and thereby the duty paid character of the goods exported remained unsubstantiated. In such view of the matter, this Court does not find any scope to interfere with the impugned order. The decisions on which the reliance was sought for by the petitioner cannot be helpful to the case of the petitioner since they were dealt with the circumstances under which the Supreme Court, considering the fact that the exporter therein had committed minor fractions in compliance of the conditions mentioned in the notification, observed that such minor procedural infractions can be condoned by the authorities concerned where there was no commission of fraud. However, the circumstances of the present case are quite different wherein the petitioner has committed serious lapses and miserably failed to comply with the conditions of the notification and the very basic condition that the goods cleared on payment of duty for home consumption are the same which were subsequently exported through the shipping bills and thereby it is proved beyond reasonable doubt that the goods exported are the same which were cleared on payment of duty and this co-requirement was not discharged in order to claim refund of the duty.
For the foregoing reasons, this Writ Petition fails and it is dismissed. No costs.