Spl Industries Ltd. vs Union of India and Others

Hemant Gupta, J.—The challenge in the present writ petition is to the order dated July 30, 2007 passed by the Assistant Commissioner; the order of the Commissioner dated April 20, 2009 and the order of the Central Government dated June 29, 2011, whereby the claim of the petitioner for rebate of duty paid on goods exported under rule 18 of the Central Excise Rules, 2002 (for short, "the Rules") was declined. The petitioner is the manufacturer of knitted fabrics and engaged in the export of knitted handloom products after indigenously procuring the raw material on payment of duty. Rule 18 of the Rules contemplate that where the goods are exported, the Central Government may, by notification, grant rebate on duty paid on such excisable goods or duty-paid material used in the processing of such goods subject to such conditions or limitations, if any, and fulfillment of procedure as may be specified in the notification. In exercise of the powers conferred under rule 18 of the Rules, the Central Government has published the notification dated June 26, 2001, subsequently substituted by Notification No. 19/2004-CE (N.T.), dated September 6, 2004, which contemplates the procedure for presentation of claims for rebate to the Central Excise Officer. The relevant clause 3(b) reads as under:

(3) Procedures:--

(b) Presentation of claim for rebate to Central Excise:--

(i) Claim of the rebate of duty paid on all excisable goods shall be lodged along with original copy of the application to the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise having jurisdiction over the factory of manufacture or warehouse or, as the case may be, the Maritime Commissioner;

(ii) The Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise having jurisdiction over the factory of manufacture or warehouse or, as the case may be, Maritime Commissioner of Central Excise shall compare the duplicate copy of application received from the officer of customs with the original copy received from the exporter and with the triplicate copy received from the Central Excise Officer and if satisfied that the claim is in order, he shall sanction the rebate either in whole or in part.

"ARE-1" Form is part of the notification, which is required to be filled before the presentation of claim for rebate to the Central Excise Officer. Part "A" of such ARE-1 Form requires certification by the Central Excise Officer whereas Part "B" requires certification by the officer of the customs to certify that the consignment has been shipped under his supervision under shipping bill.

The petitioner presented the claim for rebate without attaching original or carbon copy of Form ARE-1, but attached documents which included copies of shipping bills; copies of bill of lading, copies of bank realisation certificate; copies of invoices issued under rule 11; copy of central credit account evidencing payment of duty and the photocopies of ARE-1 Form. Such claim was declined by the Assistant Commissioner for the reason that the petitioner has not satisfied the condition of rebate inasmuch as the original and the carbon copy of ARE-1 has not been produced. Such order was affirmed in appeal as well as in revision by the Central Government.

The learned counsel for the petitioner has pointed out that furnishing of the original and duplicate copy of the application received from the office of customs is a matter of procedure for recording a satisfaction that the claim of rebate is in order. Such satisfaction can be recorded dehors the original/duplicate copy of ARE-1 Form. The petitioner has produced documents to show that the goods were exported out of the country which is proved, inter alia, from the bill of lading and the bank realisation receipts as well as the fact that the duty was paid. Therefore, the procedure of furnishing of original of ARE-1 or the duplicate copy thereof cannot defeat the substantive right of the petitioner of rebate on the goods exported only for the reason that the original and the duplicate copy of ARE-1 Form has not been produced.

We have heard learned counsel for the parties at length and find that the claim of the petitioner for rebate is required to be examined in the light of the documents produced by the petitioner in support of the assertion that the goods were in fact exported. The production of the original and the duplicate copy of ARE-1 Form duly endorsed by the officer of the customs is prima facie proof of the fact that the goods have been exported. Even if the documents are produced, the adjudicating authority can still come to the conclusion that the goods were not exported. On the other hand, if the documents such as the original or the duplicate copy of ARE-1 Form is not produced, the adjudicating authority can still come to the conclusion that the goods were in fact exported. The Central Excise Officer has to record a satisfaction that the claim is in order. It is a question of fact as to whether the claim is genuine or not. Such satisfaction can be recorded even in the absence of original/duplicate copy of ARE-1 Form. The express language of the notification is the recording of the satisfaction of the Central Excise Officer that the claim is in order so as to sanction the rebate either in whole or in part.

Since such exercise has not been undertaken by the adjudicating officer or any of the authorities under the Act, therefore, we set aside the orders passed and remit the matter back to the adjudicating authority to record a satisfaction to the effect whether the claim of the petitioner for rebate is in order or not. With the said direction and liberty, the writ petition stands disposed of.