Custom, Excise & Service Tax Tribunal
Mylan Laboratories Limited vs Chennai-Iii on 5 February, 2024
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE
TRIBUNAL,
SOUTH ZONAL BENCH, CHENNAI
COURT HALL No.III
(1) EXCISE APPEAL No.40208 OF 2017
(Arising out of Order-in-Appeal No.231-233/2016 (CXA-I) dated 21.10.2016
passed by Commissioner of Central Excise (Appeals-I), Central Excise Building,
No.26/1, Mahatma Gandhi Marg, Nungambakkam, Chennai 600 034)
M/s.Mylan Laboratories Ltd. .... Appellant
(formerly known as M/s.Agila Specialties Pvt. Ltd.)
Plot No.14, Krishnagiri Road,
SIPCOT, Phase II
Hosur 635 109.
Versus
The Commissioner of GST & Central Excise, ...Respondent
Chennai North Commissionerate
No.26/1, Mahathma Gandhi Road,
Nungambakkam,
Chennai 600 034.
(2) EXCISE APPEAL No.40209 OF 2017
(Arising out of Order-in-Appeal No.231-233/2016 (CXA-I) dated 21.10.2016
passed by Commissioner of Central Excise (Appeals-I), Central Excise Building,
No.26/1, Mahatma Gandhi Marg, Nungambakkam, Chennai 600 034)
M/s.Mylan Laboratories Ltd. .... Appellant
(formerly known as M/s.Agila Specialties Pvt. Ltd.)
Plot No.14, Krishnagiri Road,
SIPCOT, Phase II
Hosur 635 109.
Versus
The Commissioner of GST & Central Excise, ...Respondent
Chennai North Commissionerate
No.26/1, Mahathma Gandhi Road,
Nungambakkam,
Chennai 600 034.
2
Excise Appeal Nos.40208-40210 /2017
E/40309/ 2017, E/40355/2017
E/40854/2021
(3)
EXCISE APPEAL No.40210 OF 2017
(Arising out of Order-in-Appeal No.231-233/2016 (CXA-I) dated 21.10.2016
passed by Commissioner of Central Excise (Appeals-I), Central Excise Building,
No.26/1, Mahatma Gandhi Marg, Nungambakkam, Chennai 600 034)
M/s.Mylan Laboratories Ltd. .... Appellant
(formerly known as M/s.Agila Specialties Pvt. Ltd.)
Plot No.14, Krishnagiri Road,
SIPCOT, Phase II
Hosur 635 109.
Versus
The Commissioner of GST & Central Excise, ...Respondent
Chennai North Commissionerate
No.26/1, Mahathma Gandhi Road,
Nungambakkam,
Chennai 600 034.
(4) EXCISE APPEAL No.40309 OF 2017
(Arising out of Order-in-Appeal No.252/2016 (CXA-I) dated 09.11.2016 passed
by Commissioner of Central Excise (Appeals-I), Central Excise Building, No.26/1,
Mahatma Gandhi Marg, Nungambakkam, Chennai 600 034)
M/s.Mylan Laboratories Ltd. .... Appellant
(formerly known as M/s.Agila Specialties Pvt. Ltd.)
Plot No.14, Krishnagiri Road,
SIPCOT, Phase II
Hosur 635 109.
Versus
The Commissioner of GST & Central Excise, ...Respondent
Chennai North Commissionerate
No.26/1, Mahathma Gandhi Road,
Nungambakkam,
Chennai 600 034.
3
Excise Appeal Nos.40208-40210 /2017
E/40309/ 2017, E/40355/2017
E/40854/2021
(5) EXCISE APPEAL No.40355 OF 2017
(Arising out of Order-in-Appeal No.256/2016 (CXA-I) dated 18.11.2016 passed
by Commissioner of Central Excise (Appeals-I), Central Excise Building, No.26/1,
Mahatma Gandhi Marg, Nungambakkam, Chennai 600 034)
M/s.Mylan Laboratories Ltd. .... Appellant
(formerly known as M/s.Agila Specialties Pvt. Ltd.)
Plot No.14, Krishnagiri Road,
SIPCOT, Phase II
Hosur 635 109.
Versus
The Commissioner of GST & Central Excise, ...Respondent
Chennai North Commissionerate
No.26/1, Mahathma Gandhi Road,
Nungambakkam,
Chennai 600 034.
(6) EXCISE APPEAL No.40854 OF 2021
(Arising out of Order-in-Original No.29/2021-C.Ex.(Commr.) dated 31.08.2021
passed by Commissioner of GST & Central Excise, No.1, Foulks Compound, Anai
Road, Salem 636 001)
M/s.Mylan Laboratories Ltd. .... Appellant
(formerly known as M/s.Agila Specialties Pvt. Ltd.)
Plot No.14, Krishnagiri Road,
SIPCOT, Phase II
Hosur 635 109.
Versus
The Commissioner of GST & Central Excise, ...Respondent
Salem Commissionerate
No.1, Foulks Compound, Anaimedu,
Salem 636 001.
APPEARANCE :
Mr. K. Sivarajan, Consultant
For the Appellant
Mr. M. Selvakumar, Assistant Commissioner (A.R)
For the Respondent
CORAM :
HON'BLE MS. SULEKHA BEEVI.C.S., MEMBER (JUDICIAL)
HON'BLE MR. VASA SESHAGIRI RAO, MEMBER (TECHNICAL)
4
Excise Appeal Nos.40208-40210 /2017
E/40309/ 2017, E/40355/2017
E/40854/2021
DATE OF HEARING : 29.01.2024
DATE OF DECISION : 05.02.2024
FINAL ORDER Nos.40125-40130/2024
ORDER :[Per Ms. Sulekha Beevi. C.S ] As the issues involved in all these appeals being same and connected, they were heard together and are disposed of by this common order.
2. Brief facts of the first five appeals are that the appellant is a 100% EOU falling under the jurisdiction of Hosur Division. They are engaged in the manufacture and clearance of P or P Medicaments and export the same. The appellant filed refund claims seeking refund of unutilized cenvat credit for different periods in terms of Notification No.27/2012-CE (NT) dt. 18.06.2012 read with Rule 5 of Cenvat Credit Rules, 2004. After verification of the refund claims, it was noticed by the department that the appellant had not submitted copies of Customs certified A.R.E-1 in regard to the exports made by them. A letter dt. 27.11.2015 was issued to the appellant requesting to submit copies of A.R.E-1. The appellant vide letter dt. 10.12.2015 replied that EOUs are not required to follow the procedure detailed under Notification No.42/2001-CE (NT) dt. 26.06.2001 as EOUs export goods under 5 Excise Appeal Nos.40208-40210 /2017 E/40309/ 2017, E/40355/2017 E/40854/2021 B-17 Bond; that this is further elaborated by the Public Notice No.10/2001 dt. 17.10.2001 issued by the Bangalore Customs in this regard. This public notice has clarified at para-50 the procedure for export in relation to export of goods by an EOU. The public notice does not mandate to file A.R.E.-1 for export of the goods by EOU. It was also submitted by the appellant that other relevant documents for export of goods were submitted as evidence for the export made by them. The appellant had submitted the pink colour shipping bill along with refund claims which would be sufficient compliance to evidence the export of goods. Thereupon, the refund sanctioning authority passed the orders-in-original dt. 30.12.2015 and OIO dt. 11.04.2016 rejecting the refund claims on the following grounds :
(i) the appellant has not furnished A.R.E-1 to evidence the export of goods by them.
(ii) the export invoice and packing list contains the address of their Bangalore office. However, the shipping bill contains the address of Hosur unit. As the appellant has more than 10 units, the goods cleared for exports by Bangalore office may be from any of their units and there is no link document to establish that the goods exported are cleared from Hosur unit.
(iii) the appellant has not furnished the details of export invoices number under which the exports are made or have furnished some 6 Excise Appeal Nos.40208-40210 /2017 E/40309/ 2017, E/40355/2017 E/40854/2021 other invoice number which is not tallying with the export invoices submitted along with the refund claim.
3. Aggrieved by the rejection of the refund claims, the appellant filed appeals before the Commissioner (Appeals) who vide common order upheld the rejection of the refund claims by the original authority. After the appellant preferred these five appeals before this Tribunal in 2017, the department issued SCN dt. 30.11.2018 proposing to demand the duty, interest and to impose penalties alleging that the appellant has not complied with conditions in notification 42/2001 (to submit ARE-1 at the time of export) for export of goods without payment of duty. The original authority confirmed the demand, interest and penalties vide OIO dt. 31.08.2021. In Appeal E/40854/2021, the appellant has challenged the impugned OIO dt. 31.082021. Aggrieved by above orders, the appellant is now before the Tribunal.
4. Ld. Consultant Sri K. Sivarajan appeared and argued for the appellant. It was submitted by the Ld. Consultant after the appellant submitted the refund claims the department issued letter dt. 27.11.2015 directing the appellant to furnish ARE-1 documents. Apart from the letter dt. 27.11.2015 informing the appellant that they have not furnished A.R.E-1 duly certified by the Customs authorities, the appellant has not been issued any show cause notice proposing to reject the refund claim. The appellant had promptly replied to the letter dt. 27.11.2015 explaining to the department that the EOU is not required to file invoices in A.R.E.1 7 Excise Appeal Nos.40208-40210 /2017 E/40309/ 2017, E/40355/2017 E/40854/2021 as the goods are exported under B-17 Bond. However, the adjudicating authority rejected the refund not only for the reason that ARE-1 copies were not furnished, but also stating that there is mismatch with the address in the export invoices and shipping bills. It is submitted by the learned consultant that appellant was neither issued a SCN nor given a personal hearing and the order passed by the refund sanctioning authority is an exparte order. Though the appellant put forward the said plea before the Commissioner (Appeals), the same was not considered at all. Ld. consultant asserted that department cannot reject a refund claim without issuing a show cause notice and without informing the appellant as to the grounds on which the refund claim is proposed to be rejected.
5. On merits of the case, the learned consultant submitted that the main ground on which the refund claim has been rejected is that the appellant has not submitted the A.R.E.1s in respect of exports. Ld. Consultant adverted to Notification No.42/2001-CE (NT) dt. 26.06.2001 to argue that the said notification lays down conditions and procedures to be followed in the case of export without payment of duty. Under the head 'Procedure' in sub-para (2) (ii), it is stated that the exporter shall present the goods along with four copies of application in the Form A.R.E.1 specified in Annexure-IV to the Superintendent or Inspector of Central Excise. Subsequently, in sub para (iii), it is stated that where the exporter desires self-sealing and self-certification for removal of the goods 8 Excise Appeal Nos.40208-40210 /2017 E/40309/ 2017, E/40355/2017 E/40854/2021 from the factory, the owner, working partner, Managing Director of the company or a person duly authorized by such owner as the case may be, shall certify on all copes of the application that the goods have been sealed in his presence and shall send the original and duplicate copies of the application along with the goods at the place of export, and shall send the triplicate and quadruplicate copies of the application to the Superintendent or Inspector of Central Excise having jurisdiction over the factory. The appellant has been following the procedure of self-sealing and self- certification at the time of removal of goods. The said fact is known to the department and therefore the department ought not to have insisted to furnish A.R.E-1 documents. Further, the appellant had already furnished the shipping bill, packing list, Bank Realization statements and invoices being the documents for proof of exports.
6. The Public Notice No.104/2001 dt. 17.10.2001 issued by the Office of Commissioner of Customs Bangalore-I was referred to by the learned consultant to submit that the said public notice clarifies the procedure to be adopted by EOUs in the case of export of goods. In para 50, the procedure for export is explained. It is stated therein that the application for removal of goods for export from a 100% EOU shall be in Pink colour Shipping Bill (in Triplicate) to be presented, 24 hours in advance, to the Range Superintendent in-charge of the unit. The packages meant for Export should have distinctive marks and numbers so as to enable the Inspector to verify the particulars of packages with the details mentioned in the 9 Excise Appeal Nos.40208-40210 /2017 E/40309/ 2017, E/40355/2017 E/40854/2021 Shipping Bill, Packing List and the related invoice. All the copies of the Shipping Bill will be endorsed by the Superintendent and the connected documents by the Inspector. The appellant has thus produced the shipping bills which are pink colour shipping bills and followed the procedure as per the public notice. Ld. consultant referred to Circular No.17/2006-Cus. dt. 01.06.2006 issued by CBEC in regard to procedural changes in the case of EOU schemes. In para-8, it has been stated that EOUs exporting the goods under self-sealing and self-certification procedure shall submit a copy of such shipping bill along with invoices and packing list to the jurisdictional Customs / Excise Officer within 24 hours of removal of goods.
7. The Ld. Consultant asserted that the Board has clarified that the EOUs can export without A.R.E-1 when adopting the self- sealing and self-certification procedure. Although the appellant had explained these procedures adopted by them and the relevant notification and circular to the adjudicating authority, these contentions were not considered or accepted.
7.1 It is submitted by the Ld. consultant that the Tribunal in the case of Bramhos Aero Space Pvt. Ltd. Vs CC, C.Ex & ST Hyderabad
- 2016 (342) ELT 127 (Tri.-Hyd.) had occasion to consider the issue as to the non-production of A.R.E-1 and the rejection of the refund on this ground. Ld. Consultant argued that the Tribunal in the said decision observed that it was only a procedural error and the refund cannot be rejected on such procedural infractions. The 10 Excise Appeal Nos.40208-40210 /2017 E/40309/ 2017, E/40355/2017 E/40854/2021 decision in the case of Mangalore Chemicals Ltd. reported in 2002- TIOL-234-SC was also relied.
7.2 The decision in the case of Kaizon Plastomould Pvt. Ltd. Vs UOI rendered by Hon'ble High Court of Bombay dt. 03.03.2014 was adverted to by the Ld. consultant to submit that if there is adequate proof of exports, then the non-production of A.R.E-1 cannot be a ground for confirming the duty demand by alleging that conditions have not been fulfilled.
7.3 The decision in the case of Home Care (I) Pvt. Ltd. Vs CCE - Delhi - 2006 (197) ELT 110 (Tri.-Del.) was adverted to by the learned consultant to submit that the refund claim denied by the department on failure to produce A.R.E-1 document when shipping bill, packing list and bank realization certificate were furnished, was held to be not justified. The Ld. Consultant argued that as the appellant had adopted the self-sealing and self-certification procedure and necessary documents were submitted within 24 hours as prescribed by the notification 42/2001, as clarified by Board Circular, Public Notice, the department ought not to have insisted to furnish Customs certified copies of ARE-1s. The fact that the appellant submitted Pink Shipping Bills itself would evidence that appellant has adopted self sealing-self certification procedure. The Let Export Order was issued after submission of relevant documents and the goods were exported without payment of duty. The appellant received foreign exchange for the goods exported which is evidenced by the Bank realization statements. 11
Excise Appeal Nos.40208-40210 /2017 E/40309/ 2017, E/40355/2017 E/40854/2021 The refund has been rejected without considering any of these documents.
8. The second ground on which the refund has been rejected is that the shipping bill consists of the address of Hosur unit whereas the export invoice contains the address of Bangalore office only. Ld. consultant submitted that this ground of rejection was not intimated to the appellant by way of issuing a show cause notice. The appellant was thus incapacitated from issuing a reply explaining as to the reason of mismatch, if any. It is submitted that when the appellant had produced all the copies of invoices, the original authority ought to have verified and tallied the invoice numbers. The authorities below have just rendered a vague finding that there is no link document to establish that the goods exported are cleared from the Hosur unit. Under self-clearing and self-certification proceedings, the shipping bills are furnished before the jurisdictional Inspector / Superintendent who has verified the entire documents and then issued Let Export Order. The department then cannot deny the refund of unutilized credit of inputs / input services used to manufacture goods exported by alleging that the address in export invoices do not reconcile with the shipping bills. The name and other details are entirely same. Before removal of the goods from their EOU in Hosur, the appellant raised invoices on the foreign customers showing their Bangalore Corporate office as the address of the exporter. This is done for accounting purposes in SAP system. However, it is clearly declared 12 Excise Appeal Nos.40208-40210 /2017 E/40309/ 2017, E/40355/2017 E/40854/2021 in the invoice that EOU in Hosur is the manufacturer and exporter of the goods. Further, at the time of removal of goods, an ex-bond shipping bill (also referred as Pink Shipping Bill) is prepared which contains all information such as exporter (EOU), the customer details, the description and quantity of goods exported, the details of self-sealing & self-certification, invoice details etc. The clearance of each consignment of goods rom factory is informed to the jurisdictional Central Excise officer about the export along with all documents when the gods are exported, the officer of Customs who is in charge of the exports duly endorses the EDI shipping bills confirming that the goods have been actually exported.
9. When availment of credit has not been disputed by the department, refund cannot be rejected stating that there is mistake of address in export invoice and shipping bill. The allegation is flimsy as the invoice number noted in the shipping bill tallies fully. To support this argument, Ld. consultant relied upon the decision in the case of Rawmin Mining and Indus. Ltd. Vs CCE Bhavnagar - 2009 (13) STR 269 (Tri-Ahmd.). It is prayed that refund may be sanctioned.
10. In Appeal E/40854/2021, the facts are connected to the earlier appeals. It is submitted by the Ld. Consultant for appellant that pursuant to the order passed by the Commissioner (Appeals) upholding the rejection of refund claim, the appellant preferred appeals E/40208-40210/2017, E/40309/2017 and E/40355/2017 before the Tribunal. Later, a show cause notice dt. 30.11.2018 was 13 Excise Appeal Nos.40208-40210 /2017 E/40309/ 2017, E/40355/2017 E/40854/2021 issued to the appellant alleging that the appellant has removed the goods for exports without payment of duty and not complying the conditions laid down under Notification No.42/2001-CE (NT) dt. 26.06.2001. The notice thus proposed to recover the duty payable along with interest on the goods for the disputed period for non- production of A.R.E-1 documents (proof of export). The SCN proposed to impose penalties. The original authority vide order dt. 31.08.2021 has confirmed the demand, interest and penalties. The Ld. consultant submitted that the though a show cause notice was issued, the appellant was not given an opportunity of personal hearing. Thus this order was also passed exparte. The appellant had filed reply to SCN on 06.02.2019 explaining that they have preferred an appeal before the Tribunal against the rejection of the refund for non-production of A.R.E-1 document. The reply issued by the appellant though received by the department on 07.02.2019 has not been considered by the original authority at all. In para-3 of the said order, the original authority has stated that the appellant has not furnished any reply to the SCN. This is factually erroneous as the department has received the reply on 7.2.2019. The order passed confirming the duty, interest and penalties therefore is vitiated for non-compliance of the principles of natural justice.
11. It is submitted by the learned consultant that in the reply to the SCN, the appellant had explained that for each export shipment they had given the intimation to the range authority and submitted 14 Excise Appeal Nos.40208-40210 /2017 E/40309/ 2017, E/40355/2017 E/40854/2021 the Customs documents in time for the goods which have been exported from Hosur to abroad. The documents in the nature of shipping bills, bank realization statement, invoices, Form JJ are sufficient to evidence the export of goods. The allegation that the appellant has not complied with the conditions laid down in Notification 42/2001-CE (NT) dt. 26.06.2001 is legally and factually erroneous. It is prayed that the demand, interest and penalties may be set aside. Ld. counsel prayed that the appeals may be allowed.
12. Ld. A.R Sri M. Selvakumar appeared and argued for the department. It is submitted that the appellant has not furnished the required document to evidence the proof of export of goods. The Department had informed the appellant vide letter dt. 27.11.2015 to furnish the A.R.E-1 duly certified by the Customs authorities. However, the appellant chose to issue a reply dt. 10.12.2015 contending that EOUs are not required to follow the procedure under Notification No.42/2001-CE (NT) dt. 26.06.2001 as the goods are exported under B-17 bond. The original authority has thus correctly rejected the refund claim as the appellant was not able to produce any evidence to prove that the goods cleared under shipping bills are manufactured and removed from Hosur unit only. It is not a case of mere non-submission of A.R.E-1 document but also non-filing of necessary documents and non- submission of required information about the exports during the disputed period. The provisions are very clear that appellant has 15 Excise Appeal Nos.40208-40210 /2017 E/40309/ 2017, E/40355/2017 E/40854/2021 to file A.R.E-1 document for clearance of the goods for export and have to submit the particulars of clearances in the monthly returns. The original authority has also noted that the appellant has started filing A.R.E-1 after 09.01.2015 realizing that filing of same is mandatory. The decision in the case of Mangalore Chemicals Vs 2002-TIOL-234-SC relied by the learned consultant is not applicable as in the present case the appellant has not been able to provide necessary documents to prove that the goods are exported from their Hosur unit. It is argued by the Ld. A.R that the rejection of the refund and the consequential demand of duty, interest and the penalties imposed are therefore legal and proper. Ld.A.R prayed that appeals may be dismissed.
13. Heard both sides.
14. The issue to be considered is whether rejection of refund claim of unutilized cenvat credit filed under Rule 5 of Cenvat Credit Rules, 2004 read with Notification No.27/2012-CE (NT) dated 18.06.2012 is legal and proper. From the facts narrated above, we have to say that apart from issuing a letter dt. 27.11.2015 informing the appellant to furnish the relevant A.R.E-1 documents duly certified by Customs authorities, there is no show cause notice issued to the appellant proposing to reject the refund claim. So also, the appellant was not granted a personal hearing by the adjudicating authority. It is indeed very much clear that the order has been passed by the adjudicating authority in violation of 16 Excise Appeal Nos.40208-40210 /2017 E/40309/ 2017, E/40355/2017 E/40854/2021 principles of natural justice. Even though the appellant had put forward this plea of violation of natural justice before the Commissioner (Appeals) the same was not considered and he has upheld the rejection of refund claim.
15. We may now address the issues on which the refund claim has been rejected. The foremost ground on which the refund claim has been rejected is that the appellant has not furnished A.R.E-1 documents to establish that the goods have been exported. The appellant has produced the shipping bill, packing list, invoices as well as bank realization certificates. All these documents would show that the goods have been exported. Notification No.42/2001 provides for conditions in para-1 and procedures in para-2. The conditions in para-1 does not stipulate for submitting A.R.E-1 document at the time of export. However, in para-2 which lays down the procedure for export without payment of duty, it is stated that the exporter shall present the goods along with four copies of application in the Form A.R.E-1. Thus it can be inferred that the requirements to submit ARE-1 is not a condition but only a procedure. Sub-para (iii) of para-4 lays down the procedure of despatch of goods by self-sealing and self-certification. The said para which is relevant for deciding the issue reads as under :
iii. Despatch of goods by self-sealing and self-certification.-
(a) Where the exporter desires self-sealing and self-certification for removal of goods from the factory, warehouse or any approved premises, the owner, the working partner, the Managing Director or the Company Secretary, of the manufacturing unit of the goods or the owner of warehouse or a person duly authorised by such owner, working partner or the Board of Directors of such 17 Excise Appeal Nos.40208-40210 /2017 E/40309/ 2017, E/40355/2017 E/40854/2021 Company, as the case may be, shall certify on all the copies of the application that the goods have been sealed in his presence, and shall send the original and duplicate copies of the application along with the goods at the place of export, and shall send the triplicate and quadruplicate copies of the application to the Superintendent or Inspector of Central Excise having jurisdiction over the factory, warehouse, any such approved premises within twenty four hours or removal of the goods;
Provided that where the nature of goods is such that the goods cannot be sealed in a package or a container such as coal or ore, etc., exemption from sealing of package or container may be granted by the Principal Chief Commissioner or Chief Commissioner of Central Excise subject to safeguard as may be specified by him in the permission.
The safeguards shall, inter-alia, include the following:
(i) method of verification of quantity and quality of goods including testing of goods where necessary at the place of removal or despatch and at the port of export or SEZ, where the goods are received:
(ii) no remission of duty shall be allowed for loss of goods within transit;
(iii) permission shall be given on case to case basis for a specified period not exceeding one year at a time and may be withdrawn in case of misuse; and
(iv) any additional safeguards as may be specified]
(b) The Superintendent or Inspector of Central Excise shall, after verifying the particulars of the bond or letter of undertaking and endorsing the correctness or otherwise, of the particulars on the application, send to the officer to whom the bond or letter of undertaking has ben furnished either by post or by handing over to the export in a tamper proof sealed cover after recording the particulars in the official records.
(c) The exporter may prepare quintuplicate copy of application for claiming any other export incentive. This copy shall be dealt in the same manner as the original copy of application ;
(d) In case of export by parcel post after the goods intended for export has been sealed, the exporter shall affix to the duplicate application sufficient postage stamps to cover postal charges and shall present the documents, together with the package to which it refers, to the post master at the office of booking."
16. From the above, it can be seen that when exporter desires self-sealing and self certification for removal of goods, it is not necessary to submit the A.R.E-1 document and it would be sufficient if the owner, working partner, Managing Director or any authorized person certifies on all the copies of the application that the goods have been sealed in his presence. While following such 18 Excise Appeal Nos.40208-40210 /2017 E/40309/ 2017, E/40355/2017 E/40854/2021 procedure, the appellant is not required to file A.R.E-1. It is to be seen that such documents issued under self-certification are to be submitted to the Superintendent or Inspector of Central Excise having jurisdiction over the factory within 24 hours of the removal of the goods. Though the department alleges that the appellant has not complied with the procedure of submitting A.R.E.1 returns, they do not have a case that the appellant has not followed the self-sealing, self-certification procedure. It is not the case of department that the goods have been exported without their approval or without issuing Let Export Order. In fact, the allegation that there is no proof for export itself is purely procedural. The department is well aware that goods have been exported. On the allegation of non-production of documents it is alleged that there is no evidence of export goods.
17. Ld. Consultant has asserted that being a EOU, they can adopt to file pink colour shipping bill and that appellant has followed this procedure of filing pink colour shipping bill which has been stated by them in their reply dated 10.12.2015. The procedure in Public Notice No.104/2001- dt. 17.10.2001 in this regard reads as under :
"PROCEDURE FOR EXPORT:
50. The application for removal of goods for Export from a 100% EOU/EHTP shall be in Pink colour Shipping Bill, (in Triplicate) to be presented, 24 hours in advance, to the Range Superintendent in-charge of the unit. The packages meant for Export should have distinctive marks and numbers so as to enable the Inspector to verify the particulars of the packages with the details mentioned in the Shipping Bill, Packing List and the related Invoice. All the copies of the Shipping Bill will be endorsed by the Superintendent and the connected documents by the Inspector.
The Inspector will conduct the examination as ordered by the Superintendent and endorse his examination report on the original as well as the Duplicate Shipping Bill before giving orders for "LET EXPORT" and seal the packages. The original will be 19 Excise Appeal Nos.40208-40210 /2017 E/40309/ 2017, E/40355/2017 E/40854/2021 retained in the Range office and the duplicate and the triplicate returned to the Exporter who shall then dispatch the goods.
At the port of Export, the goods will be presented to the officer of Customs along with the duplicate and triplicate copy of the Shipping Bill. The packages will be checked for seal intact and the particulars verified as per the application. The proper officer will certify for allowing the shipment for Export and give the details of shipping bill number of vessel etc., and return the triplicate copy to the exporter, who will produce it to the inspector in-charge of the EOU/EHTP, as proof of export."
18. The appellant has produced sample copy of such intimation filed by them to the Superintendent of Hosur Division dt. 30.08.2014 wherein they have stated that the goods are cleared under self-sealing procedure.
19. The Board vide Circular No.17/2006-Cus. dated 1.6.2006 has clarified the procedure to be adopted by EOUs hassle free export which reads as under :
"8. Export under cover of Shipping Bill It has been brought to the notice of the Board that in certain Commissionerates where EOUs export goods under Shipping Bill procedure, a visit to the jurisdictional Customs office is required to get the Shipping Bill number. In order to simplify this procedure, the Board has decided that the unit can use Shipping Bill with running serial number beginning from the first day of the financial year in line with the procedure being followed with respect to export of goods under cover of A.R.E.1 as prescribed under Chapter 7 (Part-II) of the CBEC's Central Excise Manual. The serial number of the Shipping Bill shall be intimated in advance to the jurisdictional Superintendent of Customs/Central Excise. Furthermore, EOUs exporting goods under self-sealing and self-certification procedure, shall submit a copy of such Shipping Bill along with Invoice and packing list to the jurisdictional Customs/Central Excise officer within twenty four hours of removal of goods. For the current financial year, this facility can be availed from 1 July, 2006."20
Excise Appeal Nos.40208-40210 /2017 E/40309/ 2017, E/40355/2017 E/40854/2021
20. The above clarification issued by the Board also says that when EOUs are exporting goods under self-sealing and self- certification procedure they shall submit a copy of such shipping bill along with invoice and packing list to the jurisdictional Customs/Central Excise officer within 24 hours of removal of goods. This makes it clear that when the exporter is following the self-certification procedure, he is not required to submit the A.R.E-1 document. We find that the rejection of refund claim holding that the appellant has not produced A.R.E-! document to evidence the export of the goods is wholly unjustified.
21. The second ground on which the refund has been rejected is that the invoices do not tally as to the address so as to show that the goods have originated from Hosur unit itself. As per the self-certification procedure, the invoices and all documents have been submitted to the jurisdictional Central Excise / Customs authorities at the time of export. The credit of the duty paid on inputs and input services availed is not disputed. The present refund is for claim of unutilized cenvat credit availed on inputs and input services. At this stage of refund, the department cannot allege that the invoices on which credit has been availed do not reconcile or tally as to the address. We have perused a sample shipping bill dt. 13.11.2014. The invoice number noted is 4301000085. The exporter address in shipping bill is appellant's Hosur address. In the export invoice the exporter address is that of Appellant's Bangalore address. The invoice number is same. 21
Excise Appeal Nos.40208-40210 /2017 E/40309/ 2017, E/40355/2017 E/40854/2021 In the invoice though address is that of Bangalore, after the description of goods it is stated that the goods are manufactured by Hosur unit. The corresponding packing list shows appellant's Bangalore address. But the invoice number is same. Again the EDI Shipping Bill shows 'Factory sealed'. The policy is that duty / tax are not to be exported. These notifications are to facilitate hassle free exports so as to earn foreign exchange for the country. If the compliances can be verified by checking the invoice number in the documents the department ought not to resort to reject refund claims on flimsy and minor procedural aspects.
22. Further, the said ground has not been informed to the appellant by issuing a show cause notice. The appellant has not been given an opportunity for personal hearing also. The refund has been rejected without following the principles of natural justice.
23. From the foregoing, we find that the rejection of refund claim is not justified. We hold that the appellant is eligible for refund. The impugned orders in the first five appeals are set aside. Consequently, the demand, interest and penalties as confirmed vide order dt. 31.08.2021 in Appeal No.E/40854/2021 cannot sustain and requires to be set aside, which we hereby do. Appeal No.E/40854/2021 is allowed.
22
Excise Appeal Nos.40208-40210 /2017
E/40309/ 2017, E/40355/2017
E/40854/2021
In the result, all the appeals are allowed with
consequential reliefs, if any.
(Pronounced in court on 05.02.2024)
sd/- sd/-
(VASA SESHAGIRI RAO) (SULEKHA BEEVI. C.S)
Member (Technical) Member (Judicial)
gs