Case Law Details
Bagadiya Brothers Private Limited Vs Union of India (Chhattisgarh High Court)
Chhattisgarh High Court held that an application for extension of time by exporter to make exports beyond the period of 6 months was rejected by the department after more than 2 ½ years. Accordingly, exporters granted benefit of rebate of excise duty paid on excisable goods exported beyond time limit of 6 months.
Facts- The petitioner are merchant exporter duly registered with the department of Central Excise. They are engaged in the export of goods on the payment of excise duty in terms of Rule 18 of the Central Excise Act, 1944 read with the notification No. 19/2004 Central Excise (NT) dated 06.09.2004.
The petitioner in the instant case has made an application for extension of time to make exports beyond the period of 6 months. The application was filed on 18.12.2012. The application contained genuine reasons and documents in support justifying the delay caused and by seeking extension of time.
On the basis of such extension of time the petitioner’s claim for the rebate/refund before the jurisdictional officer. The claim for the rebate was denied by the Adjudicating Authority and affirmed by the Appellate Authority.
Notably, the application for extension of time admittedly was filed on 18.12.2012, but the same got rejected only after a period of more than 21/2 years on 10.04.2015. The petitioner thereafter approached the Commissioner (Appeals) and later to the Revisional Authority also wherein both the appeal as also the revision stood rejected.
Conclusion- Held that the respondents took more than 2 1/2 years in deciding the application for extension of time which otherwise under the notification was required to be finalized within 7 days. If the respondents have taken an inordinately long period of time in deciding the application for extension of time, the benefit of the same tilts more towards the petitioner as the notification is a beneficial notification and the benefit of which should go in favour of the Assessee. The impugned order dated 08.02.2022 (Annexure P/1) and also that passed by the Commissioner (Appeals) and the original authority therefore deserves to be and is accordingly set-aside. As a consequence, the petitioner would be entitled for claim of rebate of excise duty paid on the excisable goods exported outside India under Rule 18 of the Central Excise Rules, 2002 and the notification dated 06.09.2004.
FULL TEXT OF THE JUDGMENT/ORDER OF CHHATTISGARH HIGH COURT
1. The instant bunch of writ petitions have been filed by the petitioner challenging the order in appeal dated 08.02.2022, whereby the revision petition preferred by the petitioner stands rejected by the Principal Commissioner. Vide the impugned order passed by the Revisional Authority the order passed by the Commissioner (Appeals) and the original adjudicating authority stood affirmed. The adjudicating authority had passed an order denying the claim of rebate by the petitioner on goods exported outside India. The reason for denial of the rebate was for not having complied with the conditions for exporting the goods within 6 months of its clearance from the factory/warehouse.
2. According to the petitioner, they are merchant exporter duly registered with the department of Central Excise. They are engaged in the export of goods on the payment of excise duty in terms of Rule 18 of the Central Excise Act, 1944 read with the notification No. 19/2004 Central Excise (NT) dated 06.09.2004. The petitioner is an eligible exporter for grant of rebate i.e. refund of the duty paid on all excisable goods. The requirement under the aforesaid notification dated 06.09.2004 is that the excisable goods shall be exported within 6 months from the date on which they were cleared for export from the factory of the manufacturer or warehouse. The export can also be made within such extended period as the Commissioner of Central Excise may in any particular case allow.
3. The Commissioner, Central Excise has the powers to extend this period for the reasons to be recorded in writing in a given case. For this purpose the exporter is required to submit a written request to the Commissioner specifying the reasons which prevented the concerned dealer in exporting the goods within the stipulated 6 months period. Upon such request being made in writing by the dealer, the Commissioner, Central Excise should give his decision within 7 working days from the date of receipt of such request.
4. The petitioner in the instant case has made an application for extension of time to make exports beyond the period of 6 months. The application was filed on 18.12.2012. The application contained genuine reasons and documents in support justifying the delay caused and by seeking extension of time. On the basis of such extension of time the petitioner’s claim for the rebate/refund before the jurisdictional officer i.e. the respondent no.5. The claim for the rebate was denied by the Adjudicating Authority and affirmed by the Appellate Authority solely on the ground that the petitioner did not make the exports within the stipulated period of 6 months. It was the finding of the respondents that the petitioner did not obtain the necessary permission for making exports in the extended period of time. The application for extension of time admittedly was filed on 18.12.2012, but the same got rejected only after a period of more than 21/2 years on 10.04.2015 (Annexure P/14). The petitioner thereafter approached the Commissioner (Appeals) and later to the Revisional Authority also wherein both the appeal as also the revision stood rejected affirming the order passed by the respondent No.5. It is this order which is under challenge in these writ petitions.
5. According to the counsel for the petitioner, the impugned order is bad in law for the reason that the view taken by the respondents being too hyper-technical a ground and therefore the order cannot be termed to be either judicious, nor can it be affirmed on the administrative side. It is the non-appreciation of the application moved by the petitioner and the contents raised therein while seeking extension of time which has given rise to the cause of action.
6. According to the counsel for the respondents, there was no serious lapse on the part of the petitioner in availing the remedies that were otherwise available under the statutes to the petitioner, so far as grant of rebate or refund of duty paid on excisable goods exported outside India. According to the respondents, entertaining of such application for extension of time where the export could not be made within the stipulated period of 6 months is otherwise a very routine feature and the authorities are required to pass orders taking a liberal view rather than taking a stringent view. The contention of the petitioner is that taking a stringent view while denying the grant of rebate/refund the authorities concerned rather are defeating the very purpose and object of introduction of Export Promotion Scheme. According to the petitioner, the purpose and object behind such export promotion scheme is to provide incentive to boost export and to earn foreign exchange. According to the petitioner, the respondents ought to have appreciated the fact that the substantive fact of the export having been made since there is no doubt on this aspect, the respondents ought to have taken a liberal view. There was also no dispute to the fact that the goods exported by the petitioner the requisite duty has been discharged and paid by the petitioner. Further what has been contended by the petitioner is that the Jurisdictional Commissioner i.e. the respondent No.4 as per the provisions and manner prescribed under the notification was supposed to decide the application that the petitioner had moved on 18.12.2012 within 7 days from the receipt of the same, which apparently the respondents have failed in doing so. The respondent No.4 finally decided the said application with an interval of more than 21/2 years on 10.04.2015. The impugned order therefore deserves to be interfered on this ground also. The counsel for the petitioner heavily relied upon the judgment of the Calcutta High Court on identical set of facts in the case of “Kosmo Healthcare Pvt. Ltd. v. Asstt. Commr. Of C. EX. Kolkata-1” (2013) 297 ELT 345.
7. The counsel for the respondents per contra opposing the petitions submits that since there is a statutory requirement of having made all the exports within a period of 6 months enabling the dealer to claim for rebate/refund. According to the respondents, admittedly there was a delay of more than 6 months on the part of the petitioner in making the exports and therefore the application for extension of time was rightly rejected by the respondents. It was also the contention of the counsel for the respondents that the reasons assigned in the application also seeking for extension of time was not satisfactory enough, even the petitioner had not given plausible justifiable explanation upon certain queries being made to them subsequent to their request for extension of time being made.
8. According to the counsel for the respondents, the granting of extension beyond a period of 6 months is only a discretionary powers and the same cannot be claimed as a matter of right. According to the petitioner, the rejection of the application for extension cannot be said to be mere technical. It was contended that the case of the petitioner was non-fulfillment of the conditions laid down under the notification and also for not following the export procedures otherwise required. Thus, prayed for rejection of the writ petition more on the ground that the order of the original authority has already been tested by two further Forums first by the Commissioner (Appeals) and later in revision and thus there is hardly any scope left for the High Court in the present writ petitions under Article 226 of the Constitution of India.
9. Having heard the contention put forth on either side and on perusal of records, the admitted facts in brief is that the petitioner is an exporter duly registered with the Government and also registered with the Central Excise Department and also entitled for receiving the benefits which flow from the Central Excise statutes as also the circulars and notifications issued by the Government from time to time under the Central Excise Law. On 18.12.2012 since the petitioner could not make the exports within the required 6 months period moved an application for extension of time for making the export from the factory of manufacture/warehouse. Subsequent to the application for extension of time being submitted, the respondent No.5 issued a show cause notice to which the petitioner replied and the respondent No.5 on 05.06.2014 rejected the explanation submitted for delayed export. The application dated 18.12.2012 seeking extension of time for export of excisable goods was still undecided with the respondents inspite of the petitioner sending several reminders to the office of the respondent No.4. The said application was finally rejected vide Annexure P/14 dated 10.04.2015. In between the order of the respondent No.5 in rejecting the application for grant of rebate was challenged by the petitioner before the Commissioner (Appeals), who in turn dismissed the appeal on 28.07.2014. The said order was further subjected to revision before the Revisional Authority and the Revisional Authority also affirmed the two orders.
10. The primary ground raised by the respondents in rejecting the application for grant of rebate was that the export was not made within the stipulated period of 6 months. Further that the application for extension of time for export again was made beyond the period of 6 months. The Calcutta High Court in some what similar set of facts in the case of ‘Cosmos HCPL’ (supra) in paragraph Nos. 19, 24 to 27 and 30 held as under:
“19. When there is a time stipulation for export to avail of a benefit and the said time stipulation is not adhered to, it cannot really be said that there has only been infraction of a procedural requirement, as argued by Mr. Bagaria. However, the time stipulation of six months is not rigid. The time might be extended by Commissioner of Central Excise, in his discretion, in any particular case.
24. In Cosmonaut Chemicals v. Union of India reported in 2009 (233) ELT 46 (Guj.) a Division Bench of Gujarat High Court held, and rightly, that a claim for rebate filed beyond the stipulated time limit, due to circumstances beyond the control of claimant could not deprive the claimant of his claim to rebate, when there was proof of export.
25. In Ford India Pvt. Ltd. v. Assistant Commissioner of Central Excise, Chennai reported in 2011 (272) ELT 353 (Mad.), the Madras High Court held that substantive compliance of procedural requirements would be sufficient where factum of export is not in doubt.
26. As held by the Supreme Court in Commissioner of Customs (Import), Mumbai v. Konkan Synthetic Fibres reported in 2012 (278) ELT 37 (S.C.), a beneficial notification was required to be given a liberal interpretation. The notification in this case is a beneficial one.
27. When there is proof of export, as in the instant case, the time stipulation of six months to carry out export should not be construed within pedantic rigidity. In this case, the delay is only of about two months. The Commissioner should have considered the reasons for the delay in a liberal manner.
30.What is important is, the reason for delay. Even after export extension of time may be granted on the same considerations on which a prior application for extension of time to carry out export is allowed. If there is sufficient cause for the delay, the delay will have to be condoned, and the time for export will have to be extended. In my view, in considering the causes of delay, the Commissioner would have to take a liberal approach keeping in mind the object of the duty exemption, which is encouragement of exports. Of course, in a case of inordinate unexplained delay or a case where the delay has caused loss of revenue to the Government or in a case where there is reason to believe that export has been delayed deliberately with ulterior intention, for example, for higher gain in anticipation price variation, the delay may not be condoned.”
11. The Hon’ble Supreme Court in the case of “Mangalore Chemicals and Fertilisers Ltd. v. Deputy Commissioner” reported in 1992 (55) ELT 437 (S.C.) has granted full relief to the Assessee and held that ‘A public authority cannot be estopped from doing its public duty, but it can be estopped from relying on a technicality’. Hon’ble Supreme Court quoted with approval a passage from Francis Bennion in ‘Statutory Interpretation’ which read: “Modern Courts seek to cut down the technicalities attendant upon a statutory procedure, where these cannot be shown to be necessary to the fulfillment of purpose of the legislation”.
12. The Hon’ble Supreme Court in the case of “Commissioner of (Imports) Mumbai v. Tullow India Operations Ltd. reported in 2005 (189) ELT 401 (S.C.), held that:
“Exemption was subject to production of essentiality certificate from Director General of Hydrocarbons at the time of import. The authority did not issue the certificate in time. It was held that exemption cannot be denied merely because certificates were required to be produced at the time of importation.”
13. The Hon’ble Supreme Court in the case of “Commissioner of Central Excise v. M.P.V. & Engg. Industries” reported in 2003 (153) ELT 485 (S.C.) has held that ‘Assessee who is eligible for exemption should not be deprived of benefit simply because authorities concerned took their own time in disposing of the application’.
14. Taking into consideration the aforesaid judicial pronouncements and on appreciating the records of the writ petitions what is apparently evident is that the respondents took more than 2 1/2 years in deciding the application for extension of time which otherwise under the notification was required to be finalized within 7 days. If the respondents have taken an inordinately long period of time in deciding the application for extension of time, the benefit of the same tilts more towards the petitioner as the notification is a beneficial notification and the benefit of which should go in favour of the Assessee. The impugned order dated 08.02.2022 (Annexure P/1) and also that passed by the Commissioner (Appeals) and the original authority therefore deserves to be and is accordingly set-aside. As a consequence, the petitioner would be entitled for claim of rebate of excise duty paid on the excisable goods exported outside India under Rule 18 of the Central Excise Rules, 2002 and the notification dated 06.09.2004.
15. All these writ petitions stand allowed.
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