Pink Shipping Bills themselves Is Evidence for Adoption of Self Sealing - Self Certification, Refund of Cenvat Credit cannot be denied: CESTAT [Read Order]

The Chennai bench of Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that pink shipping bills itself is evidence for the adoption of self-sealing - self certification, refund of cenvat credit cannot be denied.

M/s Mylan Laboratories Ltd, the appellant is a 100% EOU falling under the jurisdiction of Hosur Division.  They are engaged in the manufacture and clearance of P or P Medicaments and export the same. The appellant filed refund claims seeking a refund of unutilized cenvat credit for different periods in terms of Notification No.27/2012-CE (NT) dt. 18.06.2012 read with Rule 5 of Cenvat Credit Rules, 2004.  

After verification of the refund claims, it was noticed by the department that the appellant had not submitted copies of Customs certified A.R.E-1 regarding the exports made by them.  A letter was issued to the appellant requesting to submit copies of A.R.E-1.  The appellant replied that EOUs are not required to follow the procedure detailed under Notification No.42/2001-CE (NT) dt. 26.06.2001 as EOUs export goods under  B-17 Bond.

It was also submitted by the appellant that other relevant documents for the export of goods were submitted as evidence for the export made by them. The appellant had submitted the pink colour shipping bill along with refund claims which would be sufficient compliance to evidence the export of goods. 

  After the appellant preferred these five appeals before this Tribunal in 2017, the department issued SCN dt. 30.11.2018 proposing to demand the duty, interest and to impose penalties alleging that the appellant has not complied with conditions in notification 42/2001 ( to submit ARE-1 at the time of export ) for export of goods without payment of duty. The original authority confirmed the demand, interest and penalties vide OIO dt. 31.08.2021. In Appeal E/40854/2021, the appellant has challenged the impugned OIO dt. 31.082021.

Sri K. Sivarajan appeared and argued for the appellant.  It was submitted that after the appellant submitted the refund claims the department issued letter dt. 27.11.2015 directing the appellant to furnish ARE-1 documents. 

The main ground on which the refund claim has been rejected is that the appellant has not submitted the A.R.E.1s in respect of exports. Consultant adverted to Notification No.42/2001-CE (NT) dt. 26.06.2001 to argue that the said notification lays down conditions and procedures to be followed in the case of export without payment of duty. Under the head ‘Procedure’ in sub-para (2) (ii), it is stated that the exporter shall present the goods along with four copies of application in the Form A.R.E.1 specified in Annexure-IV to the Superintendent or Inspector of Central Excise. 

The appellant has been following the procedure of self-sealing and self-certification at the time of removal of goods. The Board has clarified that the EOUs can export without A.R.E-1 when adopting the self-sealing and self-certification procedure. Although the appellant had explained these procedures adopted by them and the relevant notification and circular to the adjudicating authority, these contentions were not considered or accepted.  

The fact that the appellant submitted Pink Shipping Bills itself would be evidence that the appellant has adopted self-sealing–self-certification procedure. The Let Export Order was issued after submission of relevant documents and the goods were exported without payment of duty. The appellant received foreign exchange for the goods exported which is evidenced by the Bank realization statements. The refund has been rejected without considering any of these documents. 

A two-member bench comprising Ms Sulekha Beevi C S, Member ( Judicial ) and Mr Vasa Seshagiri Rao, Member ( Technical ) found that the rejection of the refund claim was not justifiable and held the appellant eligible for refund. 

To Read the full text of the Order CLICK HERE

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