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Judgment
Akil Kureshi, J.—The petitioner, Indian Oil Corporation (IOC for short) has filed this petition challenging the order dated November 10, 2010, passed by the Government of India, by which the revision petition filed by the petitioner came to be dismissed. Briefly stated the facts are as follows:
The petitioner, IOC, had supplied aviation fuel to Air India. It is the case of the petitioner that such fuel being supplied for foreign-bound flights was exempt from payment of excise duty. However, under mistaken belief, the petitioner had paid such excise duty. When bills were raised, the airlines refused to pay the excise duty component thereof upon which the petitioner realised that excise duty though exempt was wrongly paid. Thereupon, the petitioner filed refund claim of Rs. 18,34,210 with the excise authorities on December 19, 2006. The adjudicating authority issued show-cause notice dated February 27, 2007 calling upon the petitioner to show cause why the refund claim should not be rejected for the following reasons:
(i) The claimant has mentioned in their application that the flight to which the fuel was supplied is an international flight. For this, they have relied upon a letter of M/s. Air India. Mere certification by M/s. Air India does not prove that the goods have been supplied to foreign going flights. For proof of exportation of goods, certification by the customs authorities is mandatory and essential part, without which exportation of goods cannot be considered to be legitimate. In the absence of such certification from the jurisdictional customs authorities, export cannot be considered to be legitimate.
(ii) The claimant has admitted that they had not prepared any shipping bill/ARE-1 in respect of supply made to the flight by them. Only aircraft delivery receipts have been submitted. The aircraft delivery receipt does not bear invoice number of supplier. The said document does not contain the signature of the customs official. Thus, there does not appear to be any document which corroborate the chain of supply of duty-paid material to foreign going flight. The claimant has also admitted the fact that they have supplied duty-paid product to Air India, no ARE-1 and shipping bilk were prepared at the time of refueling their aircraft. Thus, the procedures and conditions for exportation of goods may be duty paid, or exempted as prescribed under the Central Excise Act, 1944 rules/regulations/notifications framed thereunder, as well as under the Customs Act, 1962 and rules/regulations/notifications framed thereunder or instructions issued in this behalf, has to be followed by the claimant.
(iii) The claimant has not submitted any copy of invoice of M/s. Reliance Industries Limited, Jamnagar. Further regarding the duty payment particulars, the same has not been certified properly as the mere e-mail of M/s. Reliance Industries Ltd. cannot be considered to be sufficient for grant of refund of duty.
(iv) The name of the manufacturer is claimed to have been M/s. Reliance Industries Ltd., Jamnagar. As per the provisions in case the goods is exported through merchant exporter/third party, i.e., M/s. Indian Oil Corporation Ltd. in this case, ARE-1 is required to be signed jointly by the manufacturer and the merchant exporter in the instant case, no such procedure has been followed. Further, they have not submitted any corroborative evidence to prove that the duty-paid material received from M/s. Reliance Industries Ltd. have been supplied to foreign going aircraft.
(v) No disclaimer certificate/declaration has been submitted.
(vi) Some of the supplies are time barred.
After hearing the petitioner, the adjudicating authority passed an order dated October 3, 2007 and rejected the refund claim holding that the petitioner had failed to establish the mandatory and substantive requirements of the exemption notification.
The petitioner thereupon filed an appeal against the order of the adjudicating authority. The appellate authority, however, by an order dated March 26, 2008, dismissed the appeal. The petitioner thereafter filed a revision before the Government which also came to be dismissed. The said order is impugned in the present petition.
The counsel for the petitioner submitted that though one of the grounds taken in the show-cause notice was that the refund claim was barred by limitation, admittedly, in the present case, the entire claim was made within the period of limitation. The authorities have, therefore, not pursued this issue. The counsel, with respect to the discussion of the authorities on merits of the claim, submitted that the revisional authority in other cases had taken a different view. Our attention was drawn to several documents produced on record as also the order dated March 9, 2007 passed by the Commissioner (Appeals) in the case of Indian Oil Corporation itself where after examining the documents, finding substantial compliance with the requirements of the rules, refund claim was allowed.
In support of the contention, the counsel relied on the following decisions:
(i) In the case of Leighton Contractors (India) P. Ltd., In re [2011] 267 ELT 422 (GOI) wherein the revisional authority had granted drawback ignoring the procedural infraction of the notification when it was found that the case was otherwise deserving on merits.
(ii) The counsel also relied on the decision of the revisional authority in the case of Sanket Industries Ltd., In re [2011] 268 ELT 125 (GOI) for the same purpose.
On the other hand, the learned counsel, Shri Ravani, painstakingly taking us through the orders passed by the authorities, contended that the petitioner had failed to establish that the duty-paid fuel was supplied to Air India for its foreign-bound flight. He further submitted that in the absence of such a proof, the petitioner could not sustain its refund claim. In short, the counsel supported the orders passed by the authorities on the ground that substantive mandatory requirements of the rules and the notification of exemption were not fulfilled.
Having thus heard the learned counsel for the parties, we find that there were several documents before the authorities and in particular the revisional authority, which would prima facie suggest that the petitioner had arguable case of linking the duty-paid fuel being supplied for foreign-bound flights. It is not even the case of the respondents that if such a case was established the exemption notification would not apply. In other words, even the respondents agree that if the petitioner had supplied the excise paid fuel to Air India for its foreign-bound flights as per the exemption notification, such duty ought to have been refunded. It is, however, the case of the respondents that the petitioner failed to establish this vital and important aspect.
As pointed out by the counsel for the petitioner, we also notice that looking to the peculiar nature of the transaction in such cases, the exemption notification dated June 26, 2011 itself prescribes special procedure for store for consumption on board an aircraft on foreign run. Clause (6) of the notification reads as under:
(6). Special procedure for store for consumption on board an aircraft on foreign run.--Notwithstanding anything contained in this paragraph, in case of mineral oil products falling under Chapter 27 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) exported as stores for consumption on board an aircraft on foreign run, the products as remain on board an aircraft after completion of an internal flight but prior to its reversion to foreign run, the rebate for which shall be granted without production of documents evidencing the payment of duty thereon. The proper officer of customs shall certify in the manner specified by the Commissioner of Central Excise the quantity of products left on board for determining the quantum of rebate therefor.
Being a question of fact which would require examination of bulky materials, it would not be appropriate on our part to scan through such documents and to make our final conclusive remarks on the rival contentions. However, we are of the opinion that the present is a case where the petitioner''s case should be re-examined by the revisional authority. If on availability of evidence on record, it is established that the petitioner has fulfilled the mandatory and substantive requirement of the rules and the notification, its refund claim should not be defeated on the ground of some procedural infraction or the documents not being supplied in the original at the outset. In other words, on the basis of available and reliable documents and the materials on record, if the petitioner is in a position to establish before the revisional authority that the excise duty though exempt was paid wrongly, surely its refund claim should be granted. With the above observations, the order passed by the revisional authority is set aside. For the purpose of reconsideration, the issue is placed back before the revisional authority. The revision of the petitioner shall be decided afresh bearing in mind the observations made hereinabove and after considering the submissions of both sides. The petition is disposed of accordingly.