Gujarat High Court
Rani Sati Impex vs Union Of India on 11 September, 2024
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/SCA/5485/2023 ORDER DATED: 11/09/2024
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 5485 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 6136 of 2023
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RANI SATI IMPEX
Versus
UNION OF INDIA & ORS.
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Appearance:
MR. S S IYER(6553) for the Petitioner(s) No. 1
MR CB GUPTA(1685) for the Respondent(s) No. 1,2,3,4
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE NIRAL R. MEHTA
Date : 11/09/2024
COMMON ORAL ORDER
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)
1. Heard learned advocate Mr.S.S.Iyer for the petitioners and learned advocate Mr.C.B.Gupta and learned Assistant Government Pleader Mr.Raj Tanna for the respondent-State.
2. By these petitions under Article 227 of the Constitution of India, the petitioners have challenged the order dated 19.10.2022 passed by the Revisional Authority confirming Page 1 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined the Order-in-Appeal and Order-in-Original rejecting the rebate claim of the petitioners against the export of goods as well as the penalty imposed under Section 11AC of the Central Excise Act, 1944 (for short 'the Act') read with Rules 25 and 27 of the Central Excise Rules, 2002 (for short the 'Rules').
3.1. The brief facts of the case are that the petitioners of Special Civil Application No.5485 of 2023 purchased the grey fabrics from the petitioner of Special Civil Application No.6136 of 2023 after payment of excise duty on the processed fabrics. The petitioner-M/s.Rani Sati Impex which is a merchant exporter thereafter exported such grey fabrics and submitted the four rebate claims of Rs.9,86,303/- as under :
Page 2 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined Sr.No. ARE-1 No. & Invoice No. & Shipping Bill No. Qty. Amount of rebate Date Date & Date claim (Rs.) 1 1/RI/04-05 001/14.4.04 2746800/4.5.04 6034.25 2,77,575/-
dated 14.4.04 2 2/RI/04-05 003/14.4.04 2746802/4.5.04 5092.75 2,34,266/-
dated 14.4.04 3 3/RI/04-05 002/14.4.04 2753721/ 2597.50 1,19,485/-
dated 14.4.04 7.5.04
4 4/RI/04-05 004/14.4.04 2746716/ 7716.90 3,54,977/-
dated 14.4.04 4.5.04
3.2. As a part of scrutiny of the aforesaid refund claims, the respondent conducted the investigation which resulted into the tentative conclusion that the petitioners and other co-accused persons had indulged into tampering the documents like shipping bills, etc. and in creation of forged statutory documents like ARE-I Form. The investigation was extended to recording of the statements of various persons connected with the submissions of documents and Form ARE-I for rebate purpose as under :
Page 3 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined "a) Statement dated 4.1.2005 of Shri Manibhai Atmaram Patel, Legal Adviser and Authorised Signatory of M/s Gomti Exports. He inter alia reportedly stated that he had obtained ARE-1 Nos.
01/RI/04-05, 02/RI/04-05, 03/RI/04-05 & 04/RI/04-05 all dated 14.4.2004 from Range-III, Division-I, Central Excise, Surat-I and made entry in respect thereof in the ARE-1 register of the Range and obtained signature of the Range Officers on the said four copies (except original and duplicate copy) of ARE-1s. He further deposed that he had prepared rebate claim applications and submitted the same to the Central Excise Division-I, Surat-I on 23.8.2004 alongwith shipping documents, duly attested by Shri Vivek Tulsian. He further deposed that he had made corrections in the said ARE-ls regarding quality of goods, registration number, ARE-1 No. & date, cartoon number, weight, etc. in his own handwriting. In short, he confirmed that he had changed ARE1 No. from 441, Page 4 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined 442, 443 & 444 all dated 11.5.2004 to No.01/RI/04-05, 02/RI/04-05, 03/RI/04- 05 & 04/RI/04-05 all dated 14.4.2004, after export/shipment of goods and receipt of the shipping documents.
b) Statement dated 4.1.2005 of Shri Rajubhai Shinde, sub-Agent of M/s J.B. Udani Company (CHA), Mumbai. He inter alia deposed that he had never received ARE-1 Nos. 01/RI/04-05, 02/RI/04-05, 03/RI/04-05 & 04/RI/ 04-05 all dated 14.4.2004 from the Appellant for export of goods through the aforesaid shipping bills No.2746800, 2746716 & 2746802 all dated 4.5.2004 and shipping bill No.2753721 dated 7.5.2004. He also deposed that manual correction made on the aforesaid shipping bills in respect of ARE-1 No. & Date is forged since in EDI shipping bill such manual amendments are not allowed.
c) Statement dated 10.8.2005 of Shri Vivek Tulsian, Proprietor of M/s Rani Sati Impex. He inter alia deposed that Page 5 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined all the relevant AREls were prepared by Shri Kuchubhai and Dilkumar who dealt with the work of shipment/export of goods covered under the aforesaid four shipping bills, the corrections/alterations, i.e. in original and duplicate copy of aforesaid ARE-1s, cartoon no., weight, description of goods, etc. have been corrected in handwriting script and the ARE-1 Nos. were corrected by applying white fluid and by allotting new ARE-1 Nos; whereas in the triplicate copy, the cartoon no., weight, description of goods, etc. are in typed form and in respect of ARE-1 No, no correction or alteration were found. Shri Tulsian deposed that he could not explain as to why there are such correction/ alteration made on ARE-1s as well as the differentiation/variation of the same in original/duplicate vis-a-vis triplicate copy of the respective ARE- 1s. He further deposed that after going through the evidence as well as statements shown to him, he confirmed Page 6 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined that the original ARE-1 Nos.441, 442, 443 & 444 all dated 11.5.2004 were tampered subsequently after export of goods and new ARE-1 Nos. 01/RI/04-05, 02/RI/04-05, 03/RI/04-05 & 04/RI/ 04-05 all dated 14.4.2004 were obtained by Shri Kuchubhai/ Shri Manibhai. He also deposed that the original (actual) ARE-
1 No.441, 442, 443 & 444 were notregistered with any Central Excise Authority in Surat or elsewhere. He urther deposed that the manual amendments done in their aforesaid 4 shipping bills regarding ARE-1 No. and date were forged and not authenticated by any Customs Officers.
d) Statement dated 28.2.2006 of Shri Manibhai Patel. He did not agree with the statement of Shri Vivek Tulsian and deposed that he had made corrections/alterations in the ARE-1 No. and date on the face of the shipping bills, whereas the corrections/alterations in original and duplicate ARE-1s were made by Shri Page 7 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined Kuchubhai in his presence and that all these alterations/corrections were made in the office of Shri Kuchubhai."
3.3. It appears that thereafter by letter dated 12.07.2005, the Assistant Commissioner of Customs, Nhava Sheva informed that the manual correction of ARE-I or any any other changes on EDI shipping bills are not allowed and cannot be done along with a report of the two Superintendents of Customs namely Shri S.P.S. Hooda and Shri Anvar Zaidi wherein, they have to put the signature on the shipping bills under questions where ARE-I numbers were changed and both of them categorically stated that their signatures are forged on the shipping bills and such type of changes i.e. manual correction of ARE-I number and any other changes are not allowed and cannot be done in EDI shipping bills.
Page 8 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined 3.4. On the basis of the investigations, Police Complaint was filed which is registered as Crime Register No.55/7 under Provisions of Sections 406, 420, 467, 468, 470, 471 and 120B of the Indian Penal Code in Athwalines Police Station in the year 2007 and export documents pertaining to the case were submitted on 02.01.2008 by the respondents with the Police Authorities.
3.5. Thereafter, the letters were written on 04.08.2009, 29.04.2010, 19.10.2011, 14.12.2011, 19.11.2013 and 27.01.2014 to SHO of Athwalines Police Station with a request to complete the investigation with reference to the original export documents submitted by the respondents and return the same with case status/investigation report. However, by Page 9 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined letter dated 30th January, 2014, the SHO, Athwalines Police Station, Surat replied that the case was pending with the Sessions Court since 30th January, 2008 and the original documents are under Court's Custody and the same cannot be returned withput the permission of the Court.
3.6. The respondent thereafter, issued the show-cause notice on 28th February, 2014 as to why the four rebate claims should not be rejected and the petitioners and the other co-
accused persons were called upon to show cause as to why the penalty should not be imposed under Rule 25/27 of the Rules read with Section 11AC of the Act.
3.7. The petitioners filed a reply dated 28th April, 2014 in response to the show-cause Page 10 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined notice and also filed written submissions dated 13th May, 2015 along with photo copies of the relevant documents contending inter-
alia that the petitioner M/s.Rani Sati Impex had procured the export goods from M/s.Gomti Exports who had purchased grey fabrics and got them processed from the process house and supplied the same under cover of relevant excise duty, paid invoices issued by the processor. It was also contended that the Form ARE-I No.01/RI/04-05 to 04/RI/04-05 dated 14.04.2004 were obtained from Range-III, Division-I, Central Excise, Surat-I and made entries in the respect thereof in ARE-I Register of the Range and obtained signature of the Range Officer on the four copies of the ARE-I and thereafter, they had made the exports and submitted all export documents like packing list, invoices, shipping bills, Page 11 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined mate receipts, bill of lading, Certificate of origin etc. along with Bank Realisation Certificate. Reliance was also placed upon the affidavit of the persons whose statements were recorded during the course of investigation to retract and challenge the veracity of such statements.
3.8. The Adjudicating Authority thereafter passed the Order-in-Original rejecting the rebate claim and also imposed the penalties on the petitioners of amount equivalent to total amount of four rebate claims on each of them separately. The Adjudicating Authority also imposed personal penalties on the proprietors and partners of the petitioners and other co-
noticees.
3.9. Being aggrieved, the petitioners Page 12 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined preferred an Appeal before the Commissioner (Appeals) under Section 35 of the Act contending that the Order-in-Original is contrary to the provisions of the Act and the Rules and the Adjudicating Authority has committed a grave error while denying the cross-examination of the co-noticees though the specific stand was taken by the petitioners.
3.10. It was also submitted by the petitioners before the Appellate Authority that the Adjudicating Authority has failed to appreciate that the alleged corrections/alterations do not affect or dilute the fact about the actual export and legitimate benefit, the export rebate cannot be denied if there is any reality and the petitioners were entitled to the rebate of the Page 13 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined excise duty as there is no denial to the fact of export of the goods and realisation of the foreign exchange by the merchant exporter M/s.Rani Sati Impex.
3.11. The petitioners also contended that the Adjudicating Authority has committed a grave error in imposing penalty of Rs.9,86,303/-
under Rule 25 of the Rules read with Section 11AC of the Act as neither Rule 25 of the Rules nor provisions of Section 11AC of the Act would be applicable in a case of the rebate claim and such Rule and the Provisions would be applicable to a producer, manufacturer or a registered person of a warehouse or an importer whereas, the petitioner- M/s.Rani Sati Impex is a merchant exporter which is neither a manufacturer nor producer nor registered person of a warehouse Page 14 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined nor an importer.
3.12. It was further submitted that the case of the petitioners does not fall in any of the four Clauses of Rule 25 of the Rules narrating the nature and kind of violation so as to impose the penalty as the petitioner-M/s.Rani Sati Impex being a merchant exporter has not committed any of the offences prescribed in clauses (a) to (d) of Rule 25 of the Rules.
3.13. It was further submitted by the petitioners before the Appellate Authority that there is no provision for levy of the penalty in case of the merchant exporter and the penalty is therefore required to be deleted.
3.14. The Appellate Authority after Page 15 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined considering the facts of the case and the submissions made by the petitioners confirmed the order passed by the Adjudicating Authority rejecting the rebate claim as well as the levy of penalties upon the petitioners by the impugned order dated 25.05.2016 observing as under :
"6.1 I find that the investigation clearly established that Appellant No. I/Appellant No. II/ Shri Anil Tulsian have in connivance with their Legal Consultant, Shri Vanibhai Patel and their agents Shri Kuchubhai / Shri Dilkumar indulged themselves in preparing ARE-1s by giving imaginary/hypothecated Numbers 441, 442, 443 & 444 (without registering witn Central Excise Authority), producing the same before Customs Officers at JNCH, Nhava Sheva for export of goods under Shipping Bill No.2746800, 2746716 & 2746802 all dated
04.05.2004 and 2753721 dated 07.05.2004 Page 16 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined and they managed ARE-1 Nos. 1/RI/04-05, 2/RI/04-05, 3/51/04-05 B 4/RI/04-05 ali dated 14.04.2004 fraudulenty from the jurisdictional Range Office i.e. Range- III, Division-I, Surat-I. Towards this, they tampered with the ARE-1 No. 441, 442, 443 & 444 all dated 11.05.04 by putting white fluid on the same and alloting ARE-1 No. 1/51/04-05, 2/RI/04- 05, 3/R1/04-05 & 4/R1/04-05. They presented such fraudulent documents like tampered ARE-is and Shipping Bills before Central Excise Authority to avail the rebate of Central Excise Duty amounting to Rs.9,86,303 fraudulently. The ARE-1s produced by them for the said purpose are not the genuine one and that the ARE-1s actually produced before Customs were never registered with any Central Excise Authority and as such, the same was also not genuine.
6.2 I further find In the copies of Shipping Bills placed in the respective Rebate Claim ARE-1 Nos. and dates are changed from 441, 442, 443 & 444 all Page 17 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined dated 11.05.04 to 1/RI/04-05, 2/RI/04- 05, 3/RI/04-05 & 4/RI/04-05 all dated 14.04.2004 with Customs endorsement by way of putting a round seal and signature. Whereas in the copies of Shipping Bills bearing the same No. & date forwarded by the Assistant Commissioner of Customs, SIIB (EXP)/JNCH, Nhava Sheva vide his office letter F.No.SG/MISC-37/ 2005-SIIB(X), JNCH dated 12.07.2005, ARE-1 Nos. and Dates are mentioned as 441, 442, 443 & 444 all dated 11.05.04.
6.3 I find that the Assistant Commissioner of Customs, SIIB (EXP)/JNCH, Nhava Sheva vide above said letter has informed that the manual correction of ARE-1 No. or any other changes on the EDI Shipping Bill are not allowed and cannot be done and the correction has to be carried out on the system, before let export order is given. The Assistant Commissioner of Customs, SIIB (EXP)/JNCH, Nhava Sheva vide above said letter has also Page 18 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined enclosed two reports from Shri S.P.S. Hooda & Shri Anwar Zaidi, both Superintendents of Customs, JNPT, Nhava Sheva wherein they both denied to have put the signatures on the Shipping Bills under question where the ARE-1 Nos. was changed. Both Shri S.P.S. Hooda & Shri Anwar Zaidi, categorically stated that their signatures are forged on the Shipping Bills.
6.4 Further, I find that Shri Raju Shinde, Sub-Agent of M/s J. B. Udani Company (CHA), Mumbai, who handled the export work of M/s. Rani Sati Impex, Surat, in his statement dated 04.01.2005 had also admitted that he produced ARE-1 Nos. 441, 442, 443 & 444 all dated 11.05.2004 for export of goods under Shipping Bill No. 2746800, 2746716 & 2746802 all dated 04.05.2004 and 2753721 dated 07.05.2004, he had never received ARE-1 Nos. 01/RI/04-05, 02/RI/04-05, 03/RI/04-05 & 04/RI/04-05 all dated 14.04.2004 from Appellant No. I, for export of goods under Shipping Page 19 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined Bill No: 2746800, 2746716 & 2746802 all dated 04.05.2004 and 2753721 dated 07.05.2004, he had never done any correction in the Shipping Bills regarding ARE-1 No & Date and also noi affixed round seal of the Customs.
6.5 I find that Shri Manibhai Patel, Legal Consultant, in his statement dated 04.01.2005 and 28.02.2006 had categorically admitted that he himself had changed ARE-1 Numbers as well as corrected other particulars in original and duplicate copy of respective ARE-1 after shipment of goods and receipt of shipping documents from CHA and also obtained signature of jurisdictional Central Excise Officers on triplicate copy of ARE-1, that the same was done as per the direction of Shri Anil Tulsian / Appellant No. II.
6.6 Further, Appellant No. II in his statement dated 10.08.2005 that ARE-1 No. 441, 442, 443 & 444 all dated 11.05.2004 were subsequently tampered Page 20 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined and the ARE-1 No. & Date were changed as 01/RI/04-05, 02/R/04-05, 03/R/04-05 & 04/RI/04-05 all dated 14.04.2004 that as per his knowledge Shri Kuchubhai did all the work related to correction of ARE-1 No. in Shipping Bill, affixing round seal of Customs in Shipping Bill and signature of Customs Officers towards so called amendments in the EDI Shipping Bill No. 2746800, 2746716 & 2746802 all dated 04.05.2004 and 2753721 dated 07.05.2004, that he confrmed the facts stated by Shri Rajubhal Shinde, Sub-Agent of Mis. J.B.Udani Company, CHA, who handled export work in respect of aforesaid four Shipping Bills of M/s. Rani Sati Impex, Surat that the original (actual) ARE-I No.441, 442, 443 & 444 were not registered with any Central Excise Authority in Surat or elsewhere that he does not know present address and contact number of Shri Kuchubhai /Shri Dikumar as both have left Surat since January, 2005 and their present whereabouts is not known to him.
Page 21 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined 6.7. Appellant No. 1, in defense reply dated 28.04.2014 contended that the allegation of tampering with export documents is based on statement evidences only and no corroborative evidences are available to support such an allegation. Also the Show Cause Notice itself admits that the investigation is incomplete. Here, I find that the investigation is already completed and on the basis of the said investigation only the Show Cause Notice has been issued. Also, Appellant No.I, Shri Manibhai Patel, Legal Consultant and Shri Raju Shinde, Sub- Agent of M/s J. B. Udani Company (CHA), Mumbai have never retracted their statements recorded under Section 14 of Central Excise Act, 1944. Further, Shri S.P.S. Hooda & Shri Anwar Zaidi, both Superintendents of Customs, JNPT, Nhava Sheva in their reports have denied to have put the signatures on the Shipping Bills under question where the ARE-1 Nos. was changed. Both of them Page 22 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined categorically stated that their signatures are forged on the Shipping Bills.
6.8 Appellant No.I, in defense reply submitted that since there is no denial of exports by them, neither rebate can be denied nor penalty can be imposed. Here, I find that the ARE-1 Nos. 01/RI/ 04-05, 02/RI/04-05, 03/RI/04-05 & 04/RI/04-05 all dated 14.04.2004 produced by Appellant No. I, for claiming rebate are not genuine one as the same were not produced before the Custom's Authority, JNCH at the time of Export and that the ARE-1 Nos. 441, 442; 443 & 444 all dated 11.05.2004 actually produced before Customs Authority, JNCH were never registered with Central Excise Authority, Surat and thereby, the same were not genuine. The Case Laws cited by them are not relevant in the present circumstances.
6.9 Appellant No.I, in defense reply dated 28.04.2014 contended that the Page 23 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined Show Cause Notice under reply is inherently contradictory in as much as the allegation of presenting 4 ARE1s with numbers 441 to 444 before Customs for exports but not claiming any rebate against those ARE-1s, but tampering with new numbers 1 to 4 and claiming rebate against the same does not contain any reason for such conduct. The said allegation seems to be fanciful invention and does not contain any plausible reason for the conduct alleged. For this reason alone the Show Cause Notice has to fail, Here, I find that M/s. Rani Sati Impex, Surat. Should have filed the rebate claims on the basis of 4 ARE-1s bearing Nos. 441 to 444, which were presented before the Customs Authority for exports under Shipping Bills Nos. 2746800, 2746716 & 2746802 all dated 04.05.2004 and 2753721 dated 07.05.2004 instead of ARE-1 Nos. 01/RI/04-05, 02/RI/04-05, 03/RI/04-05 & 04/RI/04-05 all dated 14.04.2004 which were not produced before the Customs Authority, JNCH.
Page 24 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined Further, I also find that tampering of the documents which have already passed through Customs procedure is a serious offence an rebate cannot be admissible on the basis of such tampered documents.
6.10 1 find that Appellant No. I, Appellant No. II had abetted the provisions of Centra Excise Act, 1944 and Rules framed there under as well as the provisions of Customs Act, 1962 in as much as they tampered the statutory documents for Customs clearance lie Shipping Bill, ARE-1 and presenting such tampered documents to Central Excise Department with an intention to avail rebate of Central Excise Duty fraudulently. I find that allthe rebate claims (totll four filed by Appellant No. I, are required and liable to be rejected summarily under Rule18 of Central Excise Rules, 2002 read with Section 11 B of the Central Excise Act, 1944. Further, for all these acts of contravention, Appellant No. I and Page 25 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined Appellant No. ll are liable for equal penalty under Central Excise Rules read with Section 11AC of the Central Excise Act, 1944."
3.15. Being aggrieved by the order passed by the Appellate Authority, the petitioners preferred four Revision Applications before the respondent-Government under Section 35EE of the Act.
3.16. Before the Revisional Authority, the petitioners have also raised the contention with regard to the limitation for issuance of the show-cause notice in the year 2014 for levy of the penalty under Section 11AC which prescribes the period of limitation of five years. It was also contented on merits that the rebate claim could not have been rejected as there is no denial to the factum of export Page 26 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined and realisation of foreign exchange by the Merchant Exporters M/s.Rani Sati Impex and its proprietors. It was further contended that both the authorities have passed the orders of rejecting the rebate claim of Rs.9,86,303/-
and levy of penalty of the said amount separately on both the petitioners as well as the imposition of penalty of Rs.5,000/- under Rule 27 of the Rules upon the proprietor of the petitioners which are required to be quashed and set aside as the petitioners are entitled to the rebate upon the exports and as the show-cause notice was beyond the period of limitation, no penalty could have been levied.
3.17. The Revisional Authority after considering the submissions made by the petitioners and the case records as well as the orders passed by both the Adjudicating Page 27 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined Authority and Appellate Authority, was of the opinion that no interference is required in the concurrent findings of facts arrived at by both the authorities observing as under :
"6. Government observes that the main reason for rejection of impugned rebate claims was that the applicants had tampered the statutory documents viz. Shipping bill and ARE-1 and presented these documents to Central Excise Department with an intention to avail rebate of Central Excise duty fraudulently.
7. Government finds that initially while verifying the rebate claims filed by the applicant-I, an enquiry was initiated as the value of export goods declared in export documents was very high as compared to the normal value of printed MMF. During the course of investigation, the fraud carried out by the applicants was exposed as detailed Page 28 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined at para 10 of the impugned 0I0, which is reproduced hereunder:
10. In view of the above, as well as the material evidences collected / gathered during the course of enquiry, it strongly transpires that M/s. Rani Sati Impex, Surat/Shri Vivek Tulsian/ Shri Anil Tulsian have in connivance with their Legal Consultant, Shri Manibhai Patel and their agent Shri Kuchubhai/Shri Dilkumar indulged in tampering the statutory documents like Shipping Bill and creation of forged statutory documents like ARE-I in a sense that they produced ARE-1 No. 441, 442, 443 & 444 all dated 11.05.04 before Customs Officers at JNCH, Nhava Sheva for export of goods under Shipping bill No.2746800, 2746716 & 2746802 all dated 04.05.2004 and 2753721 dated 07.05.2004 and after passing/shipment of the goods and receipt of document, they managed Page 29 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined ARE-1 Nos.1 /RI / 04-05, 2/ RI/ 04-
05, 3/ RI/ 04-05 & 4/ RI/ 04-05 fraudulently from the jurisdictional Range Office i.e. Range-III, Division-I, Surat-I. Towards this, they tampered with the ARE-I No. 44], 442, 443 & 444 by putting white fluid on the same and allotting ARE-
I No. 1/RI/04-05, 2/RI/04-05, 3/RI/ 04-05 & 4/RI/04-05 which is clearly evident from the original and duplicate copy of ARE-I as well as triplicate copy of ARE-I kept in respective rebate claim files. Shri Manibhai Patel, Legal Consultant, in his statement dated 04.01.05 and 28.02.06 had categorically admitted that he himself had changed ARE-I Numbers as well as corrected other particulars in original ana duplicate copy of respective ARE-1 after shipment of goods and receipt of shipping documents from CHA and also obtained signature of jurisdictional Central Excise Officers on triplicate copy of ARE-
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1. CHA Shri Raju Shinde had also admitted that the said ARE-1 No.1/RI/04-05, 2/RI/04-05, 3/RI/ 04- 05 & 4/RI/ 04-05 were never presented by him before Customs Officer at JNCH, Nhava Sheva for clearance of goods for export under Shipping Bill No.2746800, 2746716 & 2746802 all dated 04.05.2004 and 2753721 dated 07.05.2004 and towards that he produced EDI copy of Shipping Bill as well as copy of ARE-I (duly passed by Customs) available with him. The verification report received from the Customs Authority at JNCH, Nhava Sheva as well as the report/statement of two Customs Officers viz. Shri S.P.S. Hooda and Shri Anwar Zaidi who attended the shipment work / ARE-I endorsement, copy of the EDI Shipping Bill (Customs copy) also confirmed that the ARE-I Number presented before Customs and endorsed by Customs were 441, 442 443 & 444 all dated 11.05.04 and the Page 31 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined purported ARE-1 No. 1/ RI/ 04-05, 2/ RI/04-05, 3/RI/ 04-05 & 4/RI/ 04-05 were in fact never ever produced to the Customs Officers. It further appears that legally manual amendment of EDI Shipping Bill is not allowed and if at all required, it can be done only through system before the let export order is given by proper officer. The very fact gets confirmed from the aforesaid verification report from Customs Authority of JNCH, Nhava Sheva, as well as submission / reports of the Customs Officers whose names were purportedly used by aforesaid M/s. Rani Sati Impex, Surat/ Shri Vivek Tulsian/ Shri Anil Tulsian and other persons in fraudulently amending the ARE-I No. in Shipping Bills. The purported correction of ARE-I No. and date in all the four Shipping Bills under reference was done by Shri Manibhai Patel in his own handwriting as per the direction of Shri Vivek Tulsian/ Shri Anil Page 32 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined Tulsian, as admitted by Shri Manibhai Patel in his foregoing statements. Further, the ARE-I No.441, 442, 443 & 444 all dated 11.05.04 produced before Customs Authority are also not genuine since they were not registered with the jurisdictional Central Excise Authority, which is a mandatory provision. Thus, looking to all these evidences, it appears that M/s. Rani Sati Impex, Surat/ Shri Vivek Tulsian had indulged themselves in preparing ARE-Is by giving imaginary/ hypothecated numbers 441, 442, 443 & 444 (without registering with Central Excise Authority), producing the same before the Customs authority and subsequently, after shipment of goods, tampering with the said ARE-
1s by deleting / removing the
hypothecated number by applying
while fluid, thereafter getting it registered with Central Excise Authority and allotting new number, Page 33 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined presenting such fraudulent documents like tampered ARE-I and Shipping Bills before Central Excise Authority to avail the rebate of Central Excise Duty amounting to Rs.9,86,303/- fraudulently, though they were very much aware that the ARE-Is produced by them for the said purpose are not the genuine one and that the ARE-Is actually produced before Customs/passed by Customs were never registered with any Central Excise Authority and as such, the same was also not genuine.
Government further observes that on the basis of this investigation, an FIR, was lodged at the jurisdictional Police Station and the matter was pending with Hon'ble Sessions Court, Surat. Under the circumstances, the lower authorities had rightly rejected the rebate claims and imposed appropriate penalties as relevant statutory provisions have been contravened.
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8. In this regard, the Government observes that in the case of Omkar Overseas Ltd. [2003(156) ELT 167(SC)] Hon'ble Supreme Court has held in unambiguous terms that rebate should be denied in cases of fraud, collusion, or wilful misstatement or suppression. In Sheela Dyeing & Printing Mills (P) Ltd. [2007 (219) E.L.T. 348 (Tri.-Mum.)] the Hon'ble CESTAT, has held that any fraud vitiates transaction. This judgment has been upheld by the Hon'ble High Court of Gujarat.
9. In view of the findings recorded above, Government upholds the impugned Orders-in-Appeal passed by the Commissioner (Appeals), Central Excise, Customs & Service Tax, Vadodara, Appeals-ll and rejects the impugned Revision Applications."
3.18. Being aggrieved by the aforesaid order passed by the authorities rejecting the rebate claim as well as the levy of penalty, the Page 35 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined petitioners have preferred these petitions under Article 227 of the Constitution of India.
4.1. Learned Advocate Mr.S.S.Iyer for the petitioners reiterated the contentions which were raised before the Adjudication Authority, Appellate Authority and Revisional Authority contending that the rebate claim could not have been rejected only because of the alteration done in the ARE-I Forms as such Forms are only for the purpose of granting the rebate as per the Central Excise Manual which is not mandatory.
4.2. In support of his submissions, reliance was placed on the decision of this Court in case of Raj Petro Specialities Versus Union of India and Others reported in Page 36 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined (2017) 345 ELT 496 wherein, in the facts of the said case when the ARE-I Form was misplaced, relying upon the decision of the Hon'ble Bombay High Court in case of U. M. Cables limited versus Union of India reported in (2013) 21 GSTR 522 (Bombay) it was held that all other conditions and limitations are mentioned in clause (2) of the Notification for granting rebate are satisfied and the rebate claim have been rejected solely on the ground of non-submission of original and duplicate ARE-I which could not have been rejected as the petitioner was held to be entitled to the rebate of duty claim for the excisable goods which are in fact exported on payment of export duty from the respective factories.
4.3. Learned advocate Mr.S.S.Iyer for the Page 37 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined petitioners submitted that in case of U.M Cables Limited (Supra), the Hon'ble Bombay High Court after considering paragraph No.8 of Chapter-8 of the CBES's Excise Manual of Supplementary Instructions, 2005 came to the conclusion that such Notification was issued in exercise of Rule 18 of the Rules empowering the Central Government to grant the rebate of duty paid on excisable goods or on the materials used in manufacturing and processing of such goods where the goods are exported and the rebate under Rule 18 of the Rule would be subjected to the conditions of limitations, if any, and the fulfillment of such procedure as may be specified in the Notification. It was pointed out that the Hon'ble Bombay High Court after considering the Inspections Manual of Instructions issued by CBEC came to the conclusion that the procedure which has been Page 38 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined laid down in Notification and the CBEC's Manual is to facilitate the processing of the application for rebate and to enable the Authority to be duly satisfied that the two fold requirements of the goods having been exported and of the goods bearing a duty paid character are fulfilled.
4.4. It was therefore submitted that in the facts of the case, both the conditions are satisfied as there is no denial with regard to the export of the goods and the fact that the goods which were exported were duty paid goods. It was therefore submitted that merely because it was found during the course of investigation that the Form ARE-I Form was forged or which was manually corrected, the rebate claim of the petitioners could not have been rejected and no penalty could have been imposed on the petitioners.
Page 39 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined 4.5. Learned advocate Mr.S.S.Iyer for the petitioners also submitted that the petitioners have claimed the rebate on the basis of the export of goods and the submissions of the Forms are by the persons assisting the petitioners to claim the rebate and whatever the corrections/alternations made in the Forms were not within the domain of the petitioners so as to reject the rebate claim of the petitioners.
4.6. It was further submitted that the show-cause notice was issued in the year 2014 after more than five years and therefore, no penalty could be levied as provided under Section 11AC(4) of the Act read with Rule 25/27 of the Rules.
Page 40 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined 4.7. Learned advocate Mr.S.S.Iyer also pointed out that the provisions of Section 11AC of the Act would not be applicable in case of the merchant exporter as it is neither a producer or manufacturer of the excise goods for which any of the provisions of Excise Act is violated for which the penalty would be leviable. It was pointed out that at the best the petitioners are entitled to the rebate claim and in alternative, no penalty could have been levied upon the petitioners separately by the Adjudicating Authority which is erroneously confirmed by the Revisional Authority without any discussion on the levy of the penalty in the impugned orders.
5.1. On the other hand, learned advocate Mr.C.B.Gupta for the respondent Nos.1 to 4 submitted that there are concurrent findings Page 41 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined of facts as well as there is a criminal complaint pending for adjudication under the provisions of the Indian Penal Code filed in the year 2007 and the petitioners are also involved in the fraud by submitting the forged ARE-I Forms for claiming the rebate.
5.2. It is also submitted that during the course of investigation, it was found that even the signatures of the customs Superintendents have been forged for claiming the rebate and therefore, the Adjudicating Authority has rightly rejected the rebate claim and imposed the penalty under Section 11AC of the Act read with Rule 25/27 of the Rules for violations of the mandatory provisions of the Manual of the Instructions of the CBEC.
Page 42 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined 5.3. It was further submitted that the show-cause notice was issued in the year 2014 as the original documents were lying with the Court and various letters were written from time to time by the respondent-Authorities to the Police Authority for the original documents but it was pointed out that as the case was pending before the Court of Sessions, original documents could not have been returned to the respondent-Authority without permission of the Court. It was therefore submitted that the impugned show-cause notice was issued thereafter in the Month of February, 2014.
5.4. It was therefore submitted that in view of the concurrent findings arrived at by the three Authorities, no interference may be made while exercising the extra-ordinary Page 43 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined jurisdiction under Article 227 of the Constitution of India.
6. Having heard the learned advocates for the respective parties and considering the facts of the case, it is not in dispute that during the course of investigation it was found that the petitioners and other co-noticees have filed a rebate claim with forged documents like shipping bills and form ARE-I which is a mandatory requirement to claim the rebate claim.
7. The Manual of Instructions of CBEC in Chapter-8 provides for conditions and procedures relating to the export under claim of rebate as contained in Notifications issued from time to time. Paragraph No.8 of chapter-8 of the Manual reads as under :
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"8. Sanction of claim for rebate by Central Excise 8.1 The rebate claim can be sanctioned by any of the following officers of Central Excise : -
Deputy / Assistant Commissioner of Central Excise having jurisdiction over the factory of production of export goods or the warehouse; or Maritime Commissioner.
8.2 It shall be essential for the exporter to indicate on the A.R.E. 1 at the time of removal of export goods the office and its complete address with which they intend to file claim of rebate.
8.3 The following documents shall be required for filing claim of rebate:
(i) A request on the letterhead of the Page 45 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined exporter containing claim of rebate, A.R.E. 1 numbers and dates, corresponding invoice numbers and dates amount of rebate on each A.R.E. 1 and its calculations,
(ii) original copy of the A.R.E.1,
(iii) invoice issued under rule 11,
(iv) self attested copy of shipping Bill, and
(v) self attested copy of Bill of Lading.
(vi) Disclaimer Certificate [in case where claimant is other than exporter] 8.4 After satisfying himself that the goods cleared for export under the relevant A.R.E. 1 applications mentioned in the claim were actually exported, as evident, by the original and duplicate copies of A.R.E. 1 duly certified by Customs, and that the goods are of 'duty-paid' charater as Page 46 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined certified on the triplicate copy of A.R.E.1 received from the jurisdictional Superintendent of Central Excise (Range Office), the rebate sanctioning authority will sanction the rebate, in part or full.
In case of any reduction or rejection of the claim, an opportunity shall be provided to the exporter to explain the case and a reasoned order shall be issued.
8.5. Where the individual rebate claim exceeds Rs. 5 lakh, they shall be pre- audited before these are disbursed."
8. On perusal of the above procedure for sanction of the claim of rebate by Central Excise, it is mandatory for the claimant to file original copy of ARE-I. The Form ARE-I is the export document which is prepared in quintuplicate five copies which are similar to erstwhile Form AR-4. Such Forms bear running Page 47 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined Serial Numbers beginning from the first day of the financial year. Paragraph No.2 of the Chapter-8 in relation to Form ARE-I reads as under :
"2. Forms to be used 2.1 ARE.1 is the export document (See Annexure-14 in Part 7), which shall be prepared in quintuplicate (5 copies). This is similar to the erstwhile AR. This document shall bear running serial number beginning from the first day of the financial year. On ARE. 1, certain declarations are required to be given by the exporter. They should be read carefully and signed by the exporter or his authorised agent. The different copies of ARE.1 forms should be of different colours as indicated below.
Origina White
Duplicate Buff
Triplicate Pink
Quadruplicate Green
Quintuplicate Blue
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NEUTRAL CITATION
C/SCA/5485/2023 ORDER DATED: 11/09/2024
undefined
It will be sufficient if the copies of ARE.1 contain a color band on the top or right hand corner in accordance with above color scheme.
2.2 An invoice shall also be prepared in terms of rule 11 of the said Rules.
2.3 For filing rebate claim : There is no specified form for filing claim of rebate. The same may be done by the exporter on their letterhead and filed with the requisite documents."
9. Paragraph No.5 of the Chapter-8 pertains to the distribution of the documents (ARE-I) reads as under :
"5. Distribution of documents (ARE.1) 5.1 Export from the factory or warehouse 5.1.1 In the case when export takes place from the factory of warehouse, the Page 49 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined distribution of ARE I shall be as follows:
Original The said Superintendent of Central Excise shall return (First to the exporter immediately after endorsements and Copy) signature.
Duplicate The Superintendent of Central Excise shall return to the (Second exporter immediately after endorsements and signature. Copy) Triplicate Sent to the officer with whom rebate claim is to be (Third filed, either by post or by handing over to the exporter Copy) in a tamper proof sealed cover after posting the particulars in official records.
Quadruplic Retain for official records ate (Fourth Copy) Quintuplic Optional copy - The said Superintendent or Inspector of ate (Fifth Central Excise shall return to the exporter immediately Copy) after endorsements and signature.
10. From the above prescribed procedure for claim of the rebate claim for the goods exported for the duty paid goods exported, it is apparent that the petitioners and the other co-noticees have not complied with the same.
On the contrary, they have committed fraud and forged the Forms which is found during the course of investigation as per the concurrent findings of fact arrived at by the three Page 50 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined Authorities below. In such circumstances we are of the opinion that the respondent-
Authorities have rightly rejected the rebate claim of the petitioner and no interference is called for.
11. So far as the levy of penalty is concerned, learned advocate for the petitioners has vehemently submitted that the show-cause notice dated 28th February, 2014 is beyond a period of limitation as prescribed under Sub-section (4) of Section 11AC of the Act and therefore no penalty could have been levied under the said Section read with Rules 25/27 of the Rules. It was submitted that when the entire show-cause notice is time barred, even the rebate claim could not have been rejected nor the penalty could have been levied. In order to consider such Page 51 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined submissions, it would be germane to refer to the provisions of Section 11AC(4) and Rules 25 and 27 which reads as under :
"Section 11AC(4): Every notification under clause (f) of the first proviso to sub-section (2) shall be laid before each House of Parliament, if it is sitting, as soon as may be after the issue of the notification, and, if it is not siting, within seven days of its re-assembly, and the Central Government shall seek the approval of Parliament to the notification by a resolution moved within a period of fifteen days beginning with the day on which the notification is so laid before the House of the People and if Parliament makes any modification in the notification or directs that the notification should cease to have effect, the notification shall thereafter have effect only in such modified form or be of no effect, as Page 52 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined the case may be, but without prejudice to the validity of anything previously done thereunder.
RULE 25. Confiscation and penalty. --
(1) Subject to the provisions of section 11AC of the Act, if any producer, manufacturer, registered person of a warehouse or a registered dealer, -
(a) removes any excisable goods in contravention of any of the provisions of these rules or the notifications issued under these rules; or
(b) does not account for any excisable goods produced or manufactured or stored by him; or
(c) engages in the manufacture, production or storage of any excisable goods without having applied for the registration certificate required under section 6 Page 53 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined of the Act; or
(d) contravenes any of the provisions of these rules or the notifications issued under these rules with intent to evade payment of duty, then, all such goods shall be liable to confiscation and the producer or manufacturer or registered person of the warehouse or a registered dealer, as the case may be, shall be liable to a penalty not exceeding the duty on the excisable goods in respect of which any contravention of the nature referred to in clause (a) or clause
(b) or clause (c) or clause (d) has been committed, whichever is greater.
(2) An order under sub-rule (1) shall be issued by the Central Excise Officer, following the principles of natural justice.
RULE 27. General penalty:- A breach of Page 54 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined these rules shall, where no other penalty is provided herein or in the Act, be punishable with a penalty which may extend to five thousand rupees and with confiscation of the goods in respect of which the offence is committed."
12. On perusal of the above provisions, it is apparent that in the show-cause notice as contemplated under Section 11A of the Act, time period is prescribed as five years from the date of knowledge. However, in the facts of the case, as the original documents were lying with the Court of Sessions and the reminders were sent which were provided by the respondent-Authorities in 2008 to the Police Authorities for investigation and the same were not made available till 2014, show-cause notice was thereafter issued in 2014 cannot be said to be beyond the period of limitation.
Page 55 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined However, the petitioner has never raised the issue of limitation before the Adjudicating Authority nor the Adjudicating Authority have therefore had any occasion to deal with such a contention raised by the petitioners. However, as the petitioners have raised such contentions before the Revisional Authority and before this Court, as the question of limitation is mixed question of facts and law, we have permitted the petitioners to raise such contention and is accordingly, dealt with.
13. In view of the foregoing reasons, no interference is called for in the impugned orders rejecting the rebate claim and levy of penalty upon the petitioners while exercising the extra-ordinary jurisdiction under Article 227 of the Constitution of India and the Page 56 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024 NEUTRAL CITATION C/SCA/5485/2023 ORDER DATED: 11/09/2024 undefined petitions therefore being devoid of any merit are accordingly dismissed. Notice is discharged. No orders as to cost.
(BHARGAV D. KARIA, J) (NIRAL R. MEHTA,J) PALAK Page 57 of 57 Uploaded by PALAK BRAHMBHATT(HC01391) on Fri Sep 27 2024 Downloaded on : Fri Sep 27 21:28:28 IST 2024