UNION OF INDIA Vs. PRIME EXPORTS

JUDGEMENT

(1.) This Petition by the Union of India under Article 226 of the Constitution is directed against an order dated 9 February 2010 passed by the Revisional Authority under Section 35EE of the Central Excise Act, 1944 by which a claim for rebate by the Respondents has been allowed. This Petition forms a part of a batch of Petitions. In the first of the Petitions (Writ Petition No. 3956 of 2010), this Court by a judgment delivered today, has remanded the proceedings back to the Revisional Authority for reconsideration.

(2.) Prime Exports, the First Respondent, is a merchant exporter and filed rebate claims in respect of duty paid on goods manufactured by Muni Trade Private Limited, Globe Traders and Mansa Traders. The goods were exported through the Port of Mumbai. A deficiency memo-cum-show cause notice was issued to the First Respondent calling upon it to submit a copy of the acknowledgment of prior intimation given to the jurisdictional Superintendent with respect to clearance of goods from the factory under the self-sealing and self-certification procedure. The First Respondent was also directed to submit a duty payment certificate from the jurisdictional Range Superintendent. The First Respondent did not appear for a personal hearing. The Assistant Commissioner (Preventive) of the Thane Commissionerate had furnished an intimation that there was a Central Excise case of the availment of fraudulent Cenvat credit and relating to fraudulent rebate claimed against Muni Trade Private Limited. Cenvat credit had been availed of, on the basis of invoices raised by non-existent companies and utilised for duty payment of goods cleared for exports. Thereafter, a rebate of duty was claimed. The Assistant Commissioner (Rebate) rejected the claim by an order dated 22 February 2006. The Commissioner (Appeals) confirmed the rejection by an order dated 3 August 2006. The First Respondent thereupon filed a Revision Application which was allowed by the Revisional Authority by the impugned order dated 9 February 2010.

(3.) Counsel appearing on behalf of the Petitioner submitted that the basic assumption which underlies the order of the Revisional Authority is erroneous. The Revisional Authority has proceeded on the basis that there was no charge or allegation that the transaction between the exporter and the manufacturers/suppliers was not an arms length transaction in the normal course of business or that it was not bona fide. Counsel submitted that this is ex-facie incorrect. In this regard, besides relying on the findings arrived at by the Authorities below, counsel sought to place reliance on an order passed by the Commissioner of Central Excise dated 29 January 2010, in which there is a detailed account of the modus-operandi which was followed in obtaining rebate on the basis of a fraud purported on the Revenue.