Rebate claim - Date of filing claim

Case: In Re: DAGGER FORST TOOLS LTD.

Citation: 2011 (271) E.L.T. 471 (G.O.I.)

Issue:- Rebate claims - Date of filing to be first date when complete claim filed but discrepancy found due to non-endorsement of concerned Customs officer.

Return of claim for removal of discrepancy to be within stipulated time and not to be returned at any time.

Brief Facts:- Assessee are engaged in the manufacture of excisable goods viz. broches, cutting tools and measuring instruments falling under Chapter heading No. 8207 60 90/8290 32 00 of the Central Excise Tariff Act, 1985. They had exported their goods vide ARE-1 No. 1-5-06, 2/05-06, 3/05-06, 4/05-06 &/05-06 all dated 12-7-05 and debited the duty in PLA Account vide entries No. 2, 3, 4, 5 & 6 all dated 12-7-05 respectively. Assessee filed five rebate claims on 14-2-06 and during the scrutiny of the ARE-1s it was observed that all the ARE-1s were not complete in all respect as far as the endorsement of Customs department was concerned, therefore, all the rebate claims were returned to the party on 10-5-06 for necessary compliance accordingly.

Assessee resubmitted all the rebate claims on 31-7-06 i.e. after completion of one year period from the date of let export order i.e. 13-7-05 in all cases. Since the assessee have filed rebate claims duly complete in all respects on 31-7-06 therefore the claim shall be taken as filed only when all relevant documents are available. In the instant case, 31-7-06 is relevant date for the purpose of deciding the rebate claims in terms of Section 11B of the Central Excise Act, 1944. Therefore, the rebate claim is liable for rejection, on the grounds of limitation as per the provisions of Section 11B of the Central Excise Act, 1944 as the assessee had not filed the rebate claim within one year period from the date of let export order.

The Adjudicating Authority rejected the rebate claims on the ground of limitation.

In appeal, the Commissioner (A) held that the assessee had submitted the rebate claim in time. The assessee was asked to bring further documents after necessary scrutiny of claims and hence it was observed that the claim is not hit by time-bar. It was held that rebate claims were originally submitted on time i.e. on 14.02.2006 for the exports effected on 12.07.2005. The order-in-original was set aside and lower Authorities were directed to look into the claim on merits.

Aggrieved by the said order, Revenue filed revision application under Section 35EE of the Central Excise Act, 1944.

Applicant’s Contention:- Revenue contended that the inference drawn by the Commissioner (A) was not acceptable in view of para 2 of Chapter 9 of the CBEC’s Central Excise Manual, wherein the procedure to be followed in presentation of refund claim was laid down. It was specified therein that an incomplete rebate claim shall be rejected or returned to the assessee to file a complete claim including supporting documents. The claim shall be taken as filed only when all relevant documents are available.

It was submitted that the Commissioner (A) had wrongly taken the date of initial submission i.e. 14.02.2006 as the date of filing of claim.

Respondent’s Contention:- Respondent contended that the Revenue has wrongly interpreted the provisions and as such defeated the intention of the Board and of the Ministry of Finance. That only partial contents of Para 2 which were in favour of Revenue are considered. This is against the principles of law, it is mandatory for one to read and consider complete paragraph to conclude proper meaning of the subject matter. Reference was made to Para 2.4 of Chapter 9 of the Central Excise Manual. It was submitted that vide these instructions, Board had clarified that the refund claim shall not be accepted without accompanying documents for the purpose of interest liability. And non-acceptance or return of refund claim by the proper officer shall be solely depend upon the nature and importance of the documents not filed. As such if the Departmental officers are responsible for non-providing documents within time, the refund claim should be accepted. Whereas in case of respondent-assessee, all documents required and mentioned in the refund applications were submitted at one to go proper officer but the claim was returned for very invalid and illogical reason that the customs officer has not filed all information related to details of shipping bill and its date in the certificate given at back side of ARE-1 but has signed the certificate of export. That the said certification could not have changed the fact of export of goods. If at all the Commissioner wanted to be judicious and extend due benefits to applicant, he would have given importance to corroborative documents, which were available in the set of refund claim itself.

It was submitted that the last line of Para 2.4 which provides that the claim so filed after being returned will not be hit by limitation has not been considered by the Revenue. That the n-mentioning of all details of Shipping Bill in certificate given at the back of ARE-1 was the fauld of the concerned customs officer and not of the assessee.

It was submitted that in the SCN it alleged that, "the assessees has submitted rebate claims on 14-2-2006 and during the scrutiny of the ARE-1 it is observed that, all the ARE-is were not complete in all respect as far as endorsement of customs department is concerned, therefore all the rebate claims were returned to the party on 10-5-06 for necessary compliance accordingly. Whereas further it is observed that, assessee has resubmitted all the rebate claims duly complete in all respect on 37-7-06 therefore the claims shall be taken as filed only when all relevant documents are available. In the instant case, 31-7-06 is relevant date for the purpose of decide the rebate claim in terms of Section 11B. Therefore rebate claims liable for rejection on the grounds of limitation." It was submitted that allegation in SCN for rejection of rebate claim was baseless and illegal.

It was submitted that all 5 claims were filed on 14-2-06. The office of the Asstt. Commissioner has verified the same in view to grant the rebate claim to applicant on 10-5-06 and noticed some discrepancies that, the officer of the Customs has not mentioned all the details in his certificate given on ARE-1, and hence returned the claims to noticee for getting compliance. In this regard noticee would like to bring in to the kind notice that they have submitted their claims within the specified time given under Section 11B of the Act. And under Section 11B of Central Excise Act, it is specifically mentioned and as such the relevant date of submission is the date on which the rebate claim filed initially to the concerned authority.

Further the office of the Asstt. Commissioner has taken unreasonable time for scrutiny of the rebate claim i.e. 3 months after the submission is not the fault of the noticee.

Further, it is important to be noted here that, noticee has obtained all relevant and necessary documents in proof of physical export of goods out of the country and submitted to the office of the Asstt. Commissioner within time. The Customs officer has not filled all information in the certificate given at back side of the ARE-1 but certified the export, is certainly not a fault of the noticee.

It is the responsibility of concerned Govt. official to grant correct and proper certificate to assessee. Further, on pointing out the discrepancy by concerned office, if the concerned Customs Officer takes unreasonable time of 2 months to rectify his mistake is again not the fault of noticee. Further, the allegation in the SCN that, the relevant date is the date of resubmission of claim is not supported by any legal provision. The office of the Asstt. Commissioner has failed to take action on rebate claim in view to dispose off the same within prescribed time as provided under law - hence department is liable to refund the amount with appropriate interest under Section 11BB of Central Excise Act, 1944. The Divisional Office shall scrutiny the application of refund and intimate the discrepancy, if any, to assessee within 15 days from the date of receipt of application of refund. As such it is implied from the said verdict that, if assessee do not receive any communication from the divisional office pointing out any discrepancy within 15 days from the date of submission, the refund claim of the assessee is deemed correct, proper and accepted by the Assistant Commissioner, C & C.E. As such it is evident from above that, the Divisional office has delayed in compliance of the refund application within stipulated time, and hence on this ground itself applicant is entitled for interest under Section 11BB of the Central Excise Act, 1994.

Delay in scrutiny of refund by office of the Asstt. Commissioner and Discrepancy in certification on the part of Customs Officer is not the fault of the notice. he has submitted his claim in time initially - Delay due to official act should not penalize the applicant.

The noticee has not played any role in said delays and errors, hence he should not be penalized in this case.

Reasoning of Judgment:- The Government observed that the rebate claims were filed by the respondent on 14-2-06 along with all the supporting documents. However, on scrutiny of the claims, it was observed that all the ARE-1s were not complete in all respects as far as the endorsement of customs department is concerned. Hence all the rebate claims were returned to the respondent on 10-5-06 i.e. after about 3 months whereas as per the instructions given by CBEC Supplementary Instructions Excise Manual at para 3.2 of Chapter 9, the divisional officer was required to scrutinize the claim and in case of any discrepancy was required to inform assessee within 15 days from date of filing of application.

In case of respondent, the respondent had re-submitted the refund claims on 31.07.2006 after getting proper endorsement from the Customs officer.

The Government peruse the Para 2.4 of Chapter 9 of Central Excise Manual and held that the present case fell under the category of the cases which were not hit by limitation period.

Accordingly, the Government observed that the initial date of filing of the rebate claim i.e. 14-2-06 is the relevant date under Section 11B of the Central Excise Act, 1944. Hence, the rebate claims are not hit by limitation. The Government observed that technical deviations or procedural lapses are to be condoned if there is sufficient evidence as the export of the duty paid goods. No infirmity in the impugned order-in-appeal and therefore the same is upheld.

Decision:- Revision Application rejected.

Comment:- This type of decisions repeated many times but still the department keeps on issue show cause notice saying that the time limit is to be computed from the date when the claim is resubmitted. The department goes further also. In one case, they have issued show cause notice that we have not filed certain documents. We have submitted the same in reply to show cause notice. They say that the complete claim is to reckoned from the date when the complete documents have been submitted by us. Thus, the department comes in number of ways to reject the claim because they are being taught by the higher authorities to reject the claim by one way or other rather on to give benefits to the exporters.

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PJ/Case Laws/2011-12/1428

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