Non-Filing Of Declaration & Input-Output Ratio Is Procedural Requirement But Not Pre-Condition For Claiming Rebate On Excise Of Exported Goods: Bombay HC
The Bombay High Court recently clarified that just because the verification of input-output ratio was not submitted before the export of goods, it does not mean that same cannot be verified post export of goods.While giving such relaxation, the Division Bench of Justice K. R. Shriram and Justice Jitendra Jain observed that the procedure for submitting input-output ratio is inconsequential...
The Bombay High Court recently clarified that just because the verification of input-output ratio was not submitted before the export of goods, it does not mean that same cannot be verified post export of goods.
While giving such relaxation, the Division Bench of Justice K. R. Shriram and Justice Jitendra Jain observed that the procedure for submitting input-output ratio is inconsequential for claiming rebate under Central Excise Act when the claim of petitioner/ assessee is only qua excise duty paid on chassis purchased and used in the manufacture of buses which are exported.
Facts of the case
The Petitioner had purchased chassis from its sister concern, Volvo India Pvt Ltd, which was subjected to excise duty at the time of removal of the same from the factory of Volvo India and same was recovered from petitioner along with the sale price. The Petitioner, thereafter, manufactures the buses by using the said chassis and clears the same for exported without payment of duty. In the meanwhile, the petitioner made an application for rebate of Rs.53,65,198/- being basic excise duty, education cess & higher education cess by virtue of Notification No. 21/2004-CX(NT) dated Sep 06, 2004.
The fourth respondent/ Assistant Commissioner of Central Excise however, rejected the rebate claim primarily on the ground that petitioner had not filed the declaration and Form ARE-2 as required under the Notification No.21/2004 and consequently the verification of input-output ratio could not be done. Since the rejection order was upheld by the Revisional authority, the petitioner approached the High Court.
Observation of the High Court
The Bench observed that it is not the case of Revenue that one chassis can be used to manufacture two buses.
Thus, in the facts of the present case, verification of input-output ratio although not submitted before the export of goods cannot mean that same cannot be verified post export, added the Bench.
The Bench clarified that procedure for submitting input-output ratio is inconsequential in the facts of the present case, since the claim of petitioner is only qua excise duty paid on chassis purchased and used in the manufacture of buses which are exported.
Further, the Bench pointed that non-filing of declaration, and input-output ratio specified in the procedure notified in Notification No. 21 of 2004 cannot be treated as a condition to be satisfied on the non-fulfilment of which the claim of rebate is to be rejected.
Rebate claim of Petitioner is required to be examined on merits and if found eligible can certainly be considered under Rule 18 of the Central Excise Rules, added the Bench.
The Bench therefore quashed the order and directed that the rebate shall be given upon petitioner tallying the details of chassis purchased with details of chassis exported with the buses.
Cases followed:
Sri Nasiruddin v/s. State Transport Appellate Tribunal - AIR 1976 SC 331
Kusum Ingots & Alloys Ltd. v/s. Union of India - 2004 (168) E.L.T. 3 (SC)
Collector of Customs, Calcutta v/s. East India Commercial Co. Ltd., Calcutta - AIR 1963 SC 1124
Counsel for Petitioner/ Assessee: Sriram Sridharan, Shanmuga Dev and Nishtha Shrivastava
Counsel for Respondent/ Revenue: Karan Adik, Niyati Mankad, Ram Ochani, Jitendra B. Mishra, Sangeeta Yadav, Umesh Gupta, Dhananjay B. Deshmukh, Rupesh Dubey, Satyaprakash Sharma
Case Title: Volvo Group India Pvt Ltd. versus Union of India and Ors
Case Number: Writ Petition No.2837 OF 2021