IMPACT OF NON-SUBMISSION OF EXPORT INTIMATION WITHIN THE PRESCRIBED TIME IN CASE OF CT-3

The perception of law should as it helps the implementation of law effectively. Law is framed for the assessee in which they will able to pay effortlessly Central Excise duty and follow the all principal of the Central Excise law. If there is any provision which is not clear and silent then the benefit of assessee can not be denied. The main purpose of this article to highlight mistakes, which is being done by the assessee without deliberate intention and consequences thereof.

In the case of Deemed export procedure. When assessee sent goods against the CT-3 to the unit set up under EOU, EHTP, STP, and BTP scheme eligible to procure the goods under Notification No. 22/2003-C.E Dated 31st March 2003. For the removal of goods against the CT-3, there is some basic procedure laid down by the Central Excise law, which is required to be followed by the assessee. If among the several procedures any procedural mistake has been done by the assessee under the bonafide believe without deliberate intention, then any action taken by the department should not be punitive. The basic procedure for removal of the goods against the CT-3 as follows:-

Procedure For Warehousing:

The above said Rules clarify the liability of the consignor and consignee now procedure of the above said work is that user industries who want to procure goods without payment of duty make an application for the CT-3. The proper officer shall insure the balance of Bond and issue CT-3 in quadruplicate. procedure in respect of goods removed from a factory or a warehouse is that the consignor shall prepare an application form removal of goods from his factory or warehouse to user industry in quadruplicate in the from ARE-3 and send the original, duplicate and triplicate copies of ARE-3 along with the goods to the user industry. The consignor shall send quadruplicate copy of the application to the superintendent-in-charge of this factory or warehouse within twenty four hours of removal of the consignment. On arrival of the goods the user industry shall verify the goods and intimate regarding removal of goods with all three copies to the superintendent. The superintendent of the user industry depute a bond officer who verify the goods and submit a report to the superintendent. The superintendent shall send original copy of ARE-3 to superintendent of consignor, duplicate to the consignor and triplicate copy to the user-industry.  The next provision regarding failure to receive a warehousing certificate, if the consignor did not receive warehousing certificate within ninety days of the removal, the consignor shall intimate the superintendent-in-charge of his factory or ware house. If the superintendent-in-charge of the consignor of the goods does not receive the original copy application ARE-3 with certificate of warehousing, duly endorsed by the user industry and superintendent within ninety days of the removal of the goods. The superintendent must be issued weekly reminders to the superintendent of user industry. Despite of such reminders, the original copies not received within a further period of sixty days of the expiry of the ninety days period, the superintendent of the consignor shall inform his Assistant/deputy Commissioner.

 

The above mentioned procedure clarified the law laid down for the removal of goods under the warehousing provision. Now, question is that if consignor has committed any mistake such as late submission of quadruplicate copy of the ARE-3 to the superintendent-in-charge of this factory or warehouse due to unavoidable reasons and also failed to produce original re-warehousing certificate within 90 days. Then what should be the impact of that unintentional mistake?

Law is silent in this respect. Central Excise Law no where it is mentioned that if the consignor has not followed above said procedure then under which provision they may be penalized and what would be the punitive action against the consignor. Although Commissioner of Central excise, Pune-II, issued trade notice No. 63/2007 dated 06.12.2007 parallel Commissioner of Central Excise, Dibrugarh, has also issued Trade Notice No. 20/2007, dated 23.11.2007 [2007 (218) E.L.T. (T48)] in which it is laid down that attestation of quintuplicate copy of ARE-3 by range office for availing export benefit. But the above said trade notice has not been explained about the penal action for the late submission of the warehousing certificate and ARE-3 copy. Now the question is whether:-

i) Assesseee’s benefit can be denied on the basis that they could not submit ARE-3 within 24 hours of removal of consignment.

ii) Asseessee’s has to pay duty on the goods cleared by them without payment of duty because they have failed to produce original re-warehousing certificate within 90 days.

iii) Department should issue show cause notice to the consignor informing that since they failed to submit ARE-3 within 24 hours of removal of consignment and has not produce original re-warehousing certificate within 90 days, they have to pay duty on the goods cleared by them without payment of duty.

The above said mistake such as late submission of ARE-3 and warehousing certificate are procedural mistake and it may be occurred due several reasons i.e. missing of the Copy, communication problem, lack of knowledge, lack of factory staff, etc and the Consignor has right to explain the reason of above said mistake.

These are the procedural mistakes and it is settled position of law that substantial benefit cannot be denied on the ground of procedural mistake.

As per Board Circular No. 579/16/2001-CX., dated 26-6-2001, the consignor is required to receive duplicate copies of warehousing certificate duly endorsed by the consignee within 90 days of removal of goods. In this circular the main question is that whether goods reached destination or not? And if receipt of goods is not doubted then benefit cannot be denied.

So, Department should not be suppose to deny the benefit and Show Cause Notice towards payment of central excise duty on the removal of excisable goods against the CT-3.