Pradeep Jain - Chartered Accountant

Dear Sir, We have a manufacturing company with turnover of 14 cr. We have received SCN from excise regarding two issues. Firstly, Till 2011, we were only supplying locally. On 2012 onwards, we started exporting. When we applied for LUT, they put a seal on Bond, without mentioning the validity period. We thought that LUT doesn't require revalidation and exported using the same LUT no. in the ARE1, after 1 month of LUT expiry. later, Range Superintendent informed us to get new LUT. The new LUT has the validity period mentioned on it. Now, we have received a Show cause Notice,under rule 19 Central Excise Rules 2002, for exporting under expired LUT. In the first LUT, the validity was not mentioned and we were not informed of the same. Whereas, in the second LUT, the validity is clearly mentioned. Kindly advise on our defence in this situation. Secondly,they have imposed Penalty under Rule 27 Central excise rules 2002, for not filling triplicate copy of ARE1 within 24hrs. We usually export on Fridays. Saturday and Sunday, there is no facility for receiving the copies. Hence, we submit on Monday. Doesn't this account as within 24 'working' hours? please Advise...

Although it is clear that the LUT is valid for one year. But you can plead that when the export has taken place and the proof of the same has been filed then it is procedural lapse. Further, there was lapse on part of the department also and they should have informed you that the LUT is going to expire and we should get new LUT. Secondly, there is provision in General Clauses Act that when a particular act is to be done by a particular date and there is holiday on that date then it automatically taken as next working day. Hence, there is no delay and as such no question of imposition of penalty.

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