The Commissioner of Central Excise vs Jubilant Organosys Ltd.

By this Writ Petition, under Article 226 of the Constitution of India, the Commissioner of Central Excise, Raigad challenges the order passed by the Joint Secretary (Revisional Authority), Government of India dated 30th April, 2012, dismissing the Revision Application under section 35EE of the Central Excise Act, 1944. The Revision Application was directed against the order passed in Appeal by the Commissioner of Central Excise, Raigad dated 31st May, 2010.

Mr. Jetly appearing on behalf of the Petitioner submits that both the Appellate and the Revisional Authority have failed to exercise the jurisdiction vested in them by law and particularly to satisfy themselves about mandatory pre-condition. The Respondent failed to satisfy mandatory pre-condition. That mandatory pre-condition was, whether the goods which are supposed to have been exported and in relation to which the rebate claim arises were indeed the same. The goods which were in the custody of the Customs and for which let export order had been issued by the Customs Authorities and the goods which were cleared from the factory/depot were not the same. Mr. Jetly submits that the bill of lading which is issued after the goods were loaded is dated 31st March, 2007, which is well before the goods were cleared from the warehouse. In fact the mate receipt is dated 2nd April, 2007, however, the goods were removed from Bhiwandi on 2nd April, 2007 at 23.00 hours. It would have been impossible for the goods to be loaded on the ship before 24.00 hours on 2nd April, 2007. In such circumstances, the order-in-original rightly concludes that the identity and the correlation of the goods has not been established. Mr. Jetly has taken us through the findings recorded in the order-in-original and particularly at paras 10, 11 and 11.1. He has contended that the jurisdictional Superintendent, Central Excise has not verified and supervised the goods. There is no endorsement/signature on the copies of ARE1.In these circumstances, the rebate claimed was rightly rejected. Mr. Jetly has complained that without these findings being termed as perverse or vitiated by any error of law apparent on the face of the record, the Commissioner has allowed the Appeal. Equally, the Revisional Authority failed to apply its mind to these vital factors. There ought to have been an independent application of mind by the Revisional Authority. For all these reasons, he submits that the Writ Petition be allowed.

Mr. Sridharan-learned Senior Counsel appearing for the Respondent, on the other hand, supports the concurrent findings in the order of the Appellate Authority and that of the Government. He submits that the Writ Petition is not a continuation of the proceedings so as to enable this Court to reappreciate and reappraisal the factual findings. The Writ Petition be therefore dismissed.

With the assistance of the learned Counsel appearing for both sides, we have perused the Writ Petition and all the three orders. While it is true that the issue was essentially one of the mandatory requirements being fulfilled, namely, whether the goods which have been removed from the warehouse have indeed been exported or not. The co-relation or the identity of the goods, if established, only then the claim for rebate could have been allowed. In that regard, the finding recorded by the Assistant Commissioner is that the basic condition, of the goods having been exported and those claiming to be exported are matching with the once removed from the warehouse, is required to be satisfied. In regard to this condition and which is rightly termed as mandatory, the order-in-original records that there are no serial numbers and batch numbers mentioned on the drums as identification marks of the consignments. The goods originally cleared on payment of duty from the factory of the manufacturer and subsequently from their hired godown at Bhiwandi have been claimed to be the goods in relation to which the claim arises. However, necessary certificates were not issued according to the order-in-original. The Appellate Authority found on a perusal of the entire record, that the warehouse from which the goods have been exported was a dealer''s godown in which duty paid goods were being stored and it was not a warehouse approved under Rule 20 of Central Excise Rules, 2002. That was the basis on which the order-in-original proceeds. After referring to that finding in the order in original, the Appellate Authority independently scrutinised each of the ARE1 numbers and annexed to the Appeal paper book. The Jurisdictional Superintendent got the duty payment verified from the Originating Range Superintendent. Thus, both were satisfied about the identity of the goods claimed under the respective ARE1. Merely because there are no identification marks and batch numbers does not mean that the goods were not identical. If the goods involved are "controlled substance" under the Narcotic Drugs and Psychotropic Substances Act, 1985 and subject to the Control Order framed thereunder, then, the requisite details with regard to compliance of that Control Order have also been referred to. The copies of the consignment notes in relation to the goods were submitted to the Narcotics Control Bureau and the Central Bureau of Narcotics. Thus, there is complete material to establish the identity of the goods. Meaning thereby, there is no distinction or difference noted in the goods cleared from the warehouse and forwarded for onward export. It is basically this record that has been carefully perused by the Revisional Authority. A reference to the CBEC Circular relied by Mr. Jetly is to be found in para 9 of the order of the Revisional Authority. Further, the Revisional Authority concludes that the CBEC Circular is not followed in regard to some procedural part that does not mean that the goods have not been cleared for export or their identity is not established. In such circumstances, the Revisional Authority distinguishes the Judgments relied upon and which have been brought to our notice.

We find that this approach of the Revisional Authority cannot be said to be contrary to law or vitiated by non-application of mind. In the case of Commissioner of Central Excise, Chandigarh vs. Indian Overseas Corporation reported in 2009 (234) ELT 405 (H. P.) it is found that the Revenue has established that the goods were not exported from the factory, but from a branch office. That is why the 7,000 Kgs. of cotton yarn sought to be exported to Bangladesh were found to be not so exported. The mandatory condition that there should be a claim for rebate based on export of excisable goods, after payment of duty directly from the factory or warehouse was not satisfied. That condition having been not satisfied on facts that the Division Bench of the High Court of Himachal Pradesh answered the Excise reference in favour of the Revenue and against the Assessee. This Judgment is clearly distinguishable on facts. Similarly, we do not find that the conditions, which are required to be satisfied in terms of a Notification issued under Central Excise Rules 2002 and particularly Rule 18 have not been satisfied in this case.

In these circumstances, we do not think any advantage can be derived from an order passed by the Government in the case of Philip Electronics India Ltd. 2011 (273) ELT 461 (G.O.I.). Once the exporter submits proof of the goods having been actually exported to the satisfaction of the rebate sanctioning authority, the goods were clearly identifiable and co-relatable with the goods cleared from factory on payment of duty, then, para 6 of the Circular issued by the Board enables waiving of or technical departure from procedural requirements. Those not having any revenue implications that they can be condoned.

We have found that in the present case all the statutory requirements emerging from Rule 18 of the Central Excise Rules 2002 are satisfied and neither the Commissioner nor the Revisional Authority has committed any error of law apparent on the face of the record so also their orders cannot be termed as perverse enabling us to interfere in our Writ Jurisdiction. Consequently, there is no merit in the Writ Petition. It is accordingly dismissed. No costs.