By TIOL News Service

ALLAHABAD, MAY 01, 2014: THE question involved in the Writ Petition is whether rebate claims on export of goods can be denied by applying the conditions / restrictions imposed vide CBEC Circular No 354/70/97-CX dated 13.11.1997. The petitioner has been denied rebate on export of goods by relying on restrictions relating to period etc. imposed by an executive order, i.e., Circular No. 354/70/97-CX dated 13.11.1997 and it is contended that in the Statutory Order/Notification No. 19/2004-C.E. (N.T.) dated 6.9.2004, there is no such restriction of limitation and a statutory order issued in exercise of power under Rule 18 of Central Excise Rules, 2002 could not have been altered, amended, modified or efficacy thereof could not have been extended by issuing an executive order. Therefore, the respondents in proceeding to decline the claim of petitioner for rebate in Central Excise by relying on Circular dated 13.11.1997 have acted wholly illegally. It is stated that a statutory provision cannot be modified, amended or altered by an executive order.

On behalf of revenue it was contended that the Central Government possess power to issue Circulars also, which in absence of any otherwise provision, are binding.

After considering the submissions from both sides, the High Court held:

The above argument of learned counsel appearing for respondents (revenue) would not help him for the reason that by means of Circular in question, Central Board of Excise and Customs has revised the procedure, which was to be followed in respect to acceptance of proof of exports, though the procedure was already prescribed in Notification dated 6.9.2004 and, therefore, the question of revising procedure for such proof touching upon the matter already covered by Notification dated 6.9.2004 does not arise for the reason that an executive order, laying down something otherwise than what is prescribed in the Notification would not be permissible in law. It is well established that an executive order cannot prevail over the statutory rules. Mere executive decision cannot authorize the authorities concerned to do something which is not otherwise permitted under statutory rules. It is well settled that an executive order cannot prevail over statutory rules.

Accordingly, the High Court directed the revenue to re-consider the claim of petitioner with regard to rebate in central excise on the import of goods in question in the light of Notification dated 6.9.2004 and ignoring Circular dated 13.11.1997.

It may be recalled that the Delhi High Court also in the recent case of 2014-TIOL-532-HC-DEL-CUS held that the limitation inserted in Notification No 102/2007 Cus is not applicable for refund of Additional duty of Customs.

(See 2014-TIOL-605-HC-ALL-CX)