Judgment:
1. The facts of the case leading to the present appeal are that the appellants received an order from State Trading Corporation of India or supply of fabrics to Nicaragua. The appellants filed a plea for grant of refund of duty paid on the fabrics. The Assistant Collector rejected the plea of the appellants on the ground that the requisite procedure prescribed under the Rules was not followed. The appellants filed an appeal before the Ld. Collector (Appeals) who also rejected the plea of the appellants on the ground that the Assistant Collector has no locus standi to entertain the rebate claimed under Rule 12 because the appellants had not followed the procedure stipulated under Rule 12.
Against this finding of the lower authorities the appellants have filed the present appeal.
2. Shri A.N. Haksar, ld. Sr. Counsel along with Shri R. Sudhinder, Advocate appeared for the appellants and submitted that the procedure set out under Rule 12 of the Central Excise Rules, 1944 is directory in character and not mandatory. He submits that in the provisions to Rule 12 of Central Excise Rules there is a specific proviso under which the Collector can relax the procedure if he is satisfied that the goods were the same that had paid duty and were finally exported. He submits that the ld. Collector (Appeals) in his findings has observed :- "There is no dispute on the fact that goods have been exported through STC to Nicaragua. There is also no dispute on the fact that the goods are duty paid and there are sufficient documents to show that the duty paid goods have been exported to Nicaragua through STC." He submits that in view of these observations of ld. Collector (Appeals) he should have followed the provisions of Rule 12 and relaxed the procedure set out under Rule 12(1) of the Rules. He submits that since the appellants submitted not only the documents pertaining to payment of duty but also certificates of customs authorities showing that the goods with original packing, marks and numbers were exported.
Nothing more needed to be looked into for relaxing the procedure by the ld. Collector (Appeals). He submits that Rule 12 gives this power to the Collector and the word 'Collector' includes the Collector (Appeals). He submits that a case involving similar facts in the case of Collector of Central Excise, Guntur v. Binny Limited - 1987 (31) E.L.T. 722. This Tribunal has held that "the only point raised by the appellants is that the Collector (Appeals) is not competent to exercise the powers under Rule 12. We note that the Tribunal has taken a view in this matter vide Order No. ED (BOM) A. No. 12/83-C (O. No. 35/83) in the case of Collector of Central Excise, Bombay-I v. T.I. Cycles of India, dated 18-5-1983 [1993 (66) E.L.T. 497 (Tri.)] observed "in the interest of promotion of exports the Government have issued instructions to the Collectors to condone minor procedural lapses and the Collector seems to have exercised the discretion in accordance with the aforesaid instructions". Coming to the provisions of law it is seen that proviso to Rule 12 gives legal authority to the Collector to condone minor lapses. Since Rule 173PP was enacted much subsequently and for a special purpose, it is legitimate to assume that the discretion vested in the Collector under Rule 12 could apply to goods covered under Rule 173PP. In this view, we find that the Collector's orders is quite fair and impetus. We were loath to set aside such an order merely on the ground of technicalities. In this view we find that we have no reason to believe with the order passed by the Collector of Central Excise (Appeals). Accordingly, we dismiss the appeal filed by the Deputy Collector of Central Excise, Bombay-I". The ld. Counsel submitted that this clearly shows that Rule 12(1) is a procedural Rule and not mandatory as held by the ld. Collector (Appeals). He, therefore, submits that hyper technicalities should not come in the way of deciding the substantive rights and, therefore prays that the rebate/refund may be allowed.
3. Shri Jangir Singh, ld. JDR appearing for the respondent Commissioner submits that the requirements of Rules 12(1) are statutory. That Rule 12(1) requires that rebate can be given only if the goods have travelled from the manufacturer to the port under an AR4/AR4A. The ld.JDR submitted that this requirement has rightly been described by the lower authorities as mandatory and therefore since this requirement was not followed the lower authorities have rightly rejected the refund claim. He reiterated the findings of the lower authorities.
4. Heard the submissions of both sides. Rebate of duty of Central Excise paid on the final product is granted under Rule 12 of the Central Excise Rules, 1944. Rule 12 has Sub-rule (1) which stipulated that the Government may notify the procedure to be followed. This Sub-rule is followed by a proviso which inter alia provides that if the Collector is satisfied that the goods are the same on which duty was paid and were exported then he could relax the requirement of under Sub-rule (1) of Rule 12. We find that the issue of Notification under Sub-rule (1) of Rule 12 is an enabling provision. We note that there is a provision to Sub-rule (1) wherein relaxation to Rule 12 is provided.
Since the relaxation is provided under Sub-rule (1) of Rule 12 appears to be directory/procedural and not mandatory. We also note that ld.Collector (Appeals) in his order has categorically held that there is no dispute that duty was paid on the goods; that there was no dispute that the goods were exported; that these contentions were based on the documents produced by the appellants. We find that nothing is left out and in the circumstances, as already held by him he should have relaxed the provisions of Sub-rule (1) of Rule 12. Having regard to the fact that there is a categorical finding about the same goods as had paid duty being exported and the documents being available with the appellants we hold that rebate of duty is admissible to the appellants.
However, we would like to make it clear that this rebate shall be available only to the appellants and not to State Trading Corporation of India. In case, any claim has been filed by the State Trading Corporation of India pending rebate of duty on the goods the same shall have to be rejected. The appeal is, therefore, allowed with consequential relief, if any, in accordance with law.