Custom, Excise & Service Tax Tribunal
M/S. Brahmos Aero Space Pvt. Ltd vs Cc,Ce&St, Hyderabad on 4 August, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Bench SMB Court I Appeal No.E/23059/2014 (Arising out of Order-in-Appeal No.04/2014-15(H-II)CE dt. 05/06/2014 passed by CC,CE&ST(Appeals-II), Hyderabad) For approval and signature: Honble Ms. Sulekha Beevi, C.S., Member(Judicial) 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 Lordship wish to see the fair copy of the Order? 4. Whether Order is to be circulated to the Departmental authorities? M/s. Brahmos Aero Space Pvt. Ltd. ..Appellant(s) Vs. CC,CE&ST, Hyderabad ..Respondent(s)
Appearance Shri M.V.S. Prasad, Advocate for the appellant.
Shri Nagraj Naik, Authorised representative for the respondent.
Coram:
Honble Ms. Sulekha Beevi, C.S., Member(Judicial) Date of Hearing:30/06/2016 Date of decision: FINAL ORDER No._______________________ [Order per: Sulekha Beevi, C.S.] Brief facts:-
The appellant exported inputs viz. four numbers of INS monoblock, four numbers of Missile Interface Units (MIUs) and four numbers of Onboard Computer (OBCs) (total 12 sets) vide ARE-I dated 24/04/2012 to Russia for integration of Missile by their Joint Venture Company NPOM, on the strength of Letter of Undertaking. The inputs were exported for use in integration of missiles to be manufactured and supplied back. They had availed credit of duty paid on inputs. At the time of export of these inputs, the credit taken (Rs.9,67,512/-) was not reversed. Subsequently, it is the case of appellant, on wrong advice, that as inputs have been removed as such credit has to be reversed, they reversed the credit of Rs.9,67,512/-. One number of input exported was defective and appellant sent replacement of the same vide Commercial Invoice dt. 17/09/2012 and availed credit of Rs.1,70,444/- on this replacement sent. Thereafter when they came to know that they ought not to have reversed the credit, the appellants filed refund claim of Rs.11,37,956/- (Rs.9,67,512/- + Rs.1,70,444/-). A show-cause notice was issued to them. After adjudication, the adjudicating authority allowed refund of Rs.9,67,512/- but disallowed refund of Rs.1,70,444/- for the reason that there is no proof of export and that appellant cleared the goods without ARE-I, and thus failed to comply with the procedure prescribed in Notification No.42/2001 CE(NT) dt. 26/06/2001. The appellant filed appeal before the Commissioner(Appeals) who vide the order impugned herein upheld the rejection of refund of Rs.1,70,444/-. Being aggrieved the appellant is now before the Tribunal.
2. The learned counsel for appellant Shri M.V.S. Prasad submitted that in the impugned order the Commissioner(Appeals) has observed that there is no dispute that the goods were exported. He contended that non-production of ARE-I was only a procedural lapse and prayed that the same may be condoned.
3. On behalf of the Department, the learned AR Shri Nagaraj Naik submitted that as per Notification No.42/2001-CE(NT) dt. 26/06/2001, appellants ought to have cleared the goods on ARE-I. Instead, they exported the goods on commercial invoices. He placed reliance on the judgment laid in Vee Excel Drugs & Pharmaceuticals Pvt. Ltd. Vs. UOI [2014(305) ELT 100 (All.)].
4. I have heard both sides.
5. The credit of Rs.1,70,444/- which was reversed pertains to export of MIUB-144 vide commercial invoice number BM/CE/89/135 dated 17/09/2012. The Commissioner(Appeals) has categorically held that the documents produced by appellant are sufficient to prove export of goods. Except the copy of ARE-I, the appellant has produced all supporting documents like shipping bill with endorsement of customs, package list, Air way bill, export invoice etc. The learned counsel submitted that the export without ARE-I was only a procedural error. The Honble High Court in the case of Vee Excel Drugs & Pharmaceuticals Pvt. Ltd. (supra) relied by learned AR has held that ignorance of law is no excuse and that in absence of duly certified copies of ARE-I, the rejection of rebate was proper. That such lapse is not condonable.
6. The appellant contends that substantive benefit of refund may not be denied on account of procedural lapse. In Mangalore Chemicals & Fertilisers Ltd. Vs. DCCE [1991(58) ELT 437 (SC)] while drawing a distinction between procedural condition which is technical in nature and a substantive condition, it was held that procedural lapses of technical nature can be condoned, so that substantive benefit is not denied. It is settled law that procedural infractions of notifications/ circulars should be condoned if exports have really taken place. In the instant case, the Department has no case of fraud or mischief on the part of appellant. Further the appellant is a public sector undertaking. It is not the case of department, nor has it been disputed by them that the impugned goods have not actually been exported. This being so, the non-submission of an application for exporting the goods in ARE-I format will have to be treated as a procedural lapse which can be condoned. This is the very essence of the judgment of Honble Supreme Court, cited supra. Following the same, in my view, the substantive benefit should not be denied for the procedural lapse. The Honble High Court of Allahabad has not referred to the said judgment of Honble Apex Court.
7. In view thereof, I hold that the non-submission of ARE-I being a procedural lapse can be condoned. The appellant is eligible for refund of Rs.1,70,444/-.
8. In the result, the appeal is allowed with consequential reliefs, if any.
(Pronounced in court on .) SULEKHA BEEVI C.S. MEMBER(JUDICIAL) Raja.
2