M/S. Jagdamba Industries vs Commissioner Of Central Excise

[Arising out of Order-in-Appeal No 65-CE/2005 dated 18.3.2005 passed by the Commissioner of Central Excise (Appeals ), New Delhi]

For approval and signature:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Hon'ble Shri B. Ravichandran, Member (Technical)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

M/s. Jagdamba Industries Appellants

Vs.

Commissioner of Central Excise Respondent

Delhi

Appearance:

Shri D K Nayyar and Rajiv Tuli, Advocates for the Appellants

Shri S Nunthuk, Jt.CDR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Hon'ble Mr. B Ravichandran, Member (Technical)

Date of Hearing /decision: 01.10.2015

FINAL ORDER NO. 53133 /2015-EX(DB)

Per B Ravichandran:

The appellant is before us against the order dated 21.3.2005 of Commissioner (Appeals) confirming the rejection of refund claim filed by them by the original authority. The appellants are engaged in the manufacture of stainless steel cutlery, tableware, kitchenware etc. They filed 4 refund claims on 11.3.2003 seeking refund of Cenvat credit for four quarters starting from 1.1.2002 to 31.12.2002 in terms of section 11B of Central Excise Act, 1944 read with Rule 5 of Cenvat Credit Rules, 2002 and notification No. 11/02 CE-NT dated 1.3.02. The claims were rejected by the original authority and the appellate authority as they have not followed the prescribed procedure. The appellant, in appeal before us, pleaded that the fact that the impugned goods were cleared on ex-factory price and were exported out of India is not in dispute. They contended that they have complied with all the basic conditions of notification, like filing declaration specifying the norms for input output ratio, procurement of raw material, removal of goods for export, actual export and presentation of claim for rebate.

It was submitted that except for filing ARE 2 and fixation of input output ratio at the point of clearance of goods, there is no procedural infirmity in their exports. They were clearing goods for export under self-removal procedure and the ARE 2 has to be filed within 24 hours of the removal of goods from the factory. This will show that this is only an intimation and not an obligation for verification of export goods before clearance. The goods exported by them have been subjected to customs clearance and all the relevant documents like shipping bill, bill of lading etc. have been submitted along with bank realization certificate to prove the export of goods out of country. Regarding fixation of input/output ratio, they have pleaded that their input output ratio is as per the accepted norms of DGFT list at Entry No. C 832 and C 819 in SION. Regarding registration with the department, they have submitted that they are manufacturing of stainless steel kitchenware, tableware using duty paid inputs and were exporting 100% of their production. They were registered with the Central Excise department during the period 18.3.2002 to 21.8.2002.

Non-registration for the whole period of refund claim can at best be called a procedural lapse. This cannot be a reason for rejection of the otherwise eligible claim. They have relied on various case laws in support of their claim that their claim of refund can not be rejected only on the procedural ground. During the course of argument, learned Counsel for the appellant reiterated the grounds of appeal. He stated that though in the appeal, they have contested the partial rejection of the claim on the question of time bar, he is not pressing for the same. However, on the question of rejection of refund claim on certain shortcomings in the procedure, he strongly pleaded that they have substantially fulfilled the conditions.

2. Learned AR, on the other hand, reiterated the finding of the lower authorities and stated that the appellants are not eligible for refund due to their failure to follow the stipulated procedure.

3. Heard both the sides and examined the appeal records.

4. It was admitted fact of the case that the appellants did export the impugned goods manufactured using duty paid inputs. Their claim for refund is rejected only on failure to follow certain procedure laid down. While examining the same it has to be considered whether or not this non-adherence to the procedure will be fatal to the claim of the appellant for refund. The learned Commissioner (Appeals) stated that by not following the procedure the appellants have evaded various checks to be conducted by the department for verification of duty paying documents, movement of raw material etc. Learned Commissioner (Appeals) have not examined each one of such procedural requirements and how any non-adherence to that will result in the rejection of claim of party. Relying on the decision of Honble Apex Court in the case of Wipro Ltd. [1997 54 ELT 470 (SC)], the learned Commissioner (Appeals) summarily concluded that the concessional claim can be availed only in the manner prescribed therein and on fulfillment of the conditions specified in the notification for the purpose. The show cause notice alleged that the appellants have not given due declaration about the manufacture.

The appellants have made intimation to the department on 28.2.2002 for availing the benefit under notification No. 8/01. They were the SSI unit exporting their entire production out of India. It is evident that all the duty paid inputs are, as such, forming part of exported final product only. There is no claim or evidence against this fact. The appellants filing declaration intimating the export of goods manufactured during the year can be considered as sufficient fulfillment of the procedure in view of the appellant being SSI unit involved in 100% export. Regarding input/output norms, we find that same is not fixed by the Asstt. Commissioner for the impugned period, the appellants followed the adopted norms as per DGFT EXIM Policy. It is seen for the later financial year 2003-2004 Asstt.Commissioenr accepted the said norms after due verification. Regarding procurement of duty paid raw material, the appellants contended that said raw material are procured from the registered factory directly and duty paid documents for inputs have also been submitted along with refund claims. We find that in appellants case the ARE 2 for export has to be filed within 24 hours of clearance and as such, there is no scope for prior verification of the goods by the officers.

The cleared goods have been exported and all the relevant customs clearance documents have been filed. These are not in dispute. The appellants also filed further evidence of bank realization documents certifying regular receipt of sale proceeds of exported goods.

5. Considering the above factual position, we find that the substantial benefit of refund claim cannot be rejected in the present case. However, the claims which is filed beyond the period prescribed in section 11B will be hit by time bar. We find that the other claims can rightly be eligible to the appellants. To this extent, we set aside the impugned order and allow the appeal with consequential relief, if any.

( operative part of the order pronounced in the open court )

( Ashok Jindal ) Member(Judicial)

( B Ravichandran )

Member(Technical)

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