2013 (12) TMI 1461 - AT - Central Excise

Tribunal grants waiver to iron ore exporter under Notification No. 23/2003-C.E.

The Tribunal ruled in favor of the applicant, a Public Sector Undertaking engaged in the manufacture and export of iron ore pellets, determining their ... Demand of differential duty - Clearance of goods to DTA Unit over and above 50% of DTA entitlement under Notification No. 23/2003-C.E., dated 31-3-2003 - Non payment of 4% additional duty - whether the applicant is eligible for the benefit of Notification No. 23/2003-C.E - Held that:- exemption benefit would be extended to the goods manufactured in EOU cleared into DTA in accordance with the provisions of Foreign Trade Policy. Then, it has to fulfil the particular conditions as specified in the Table appended thereto. EOU is permitted to clear the goods into DTA as per provisions of Paragraph 6.8 of Foreign Trade Policy. Concessional rate of duty under would be restricted as per Condition 2, to the goods cleared into DTA as per provisions of sub-paragraphs (a), (d), (e) and (g) of Paragraph 6.8 of Foreign Trade Policy, which are permitted to sell into DTA in a particular limit. On the other hand, the concessional rate of duty of serial No. (1) of the Table of the said notification would apply to the goods cleared into DTA in accordance with the provisions of Foreign Trade Policy and subject to fulfilment of condition No. 1 insofar as the goods cleared into DTA are not exempted by the State Government from payment of sales tax or value added tax. Sub-paragraph (h) of Paragraph 6.8 permitted to sell into DTA upon intimation to Development Commissioner provided they have achieved positive NFE. The purpose of Notification No. 23/2003-C.E. is to extend the benefit of concessional rate of duty to the goods manufactured in an EOU and cleared into DTA in accordance with the provisions of Policy. There is no dispute that the applicant cleared the goods into DTA in accordance with the provisions of Paragraph 6.8(h) of Policy. It is not the case of the Department that the applicant had violated Condition No. 1 as stipulated in Serial No. 1 of the Table of the Notification. So, we do not find any reason to deny the benefit of concessional rate of duty under Sl. No. 1 of the Table of the Notification as claimed by the applicant. - Stay granted. Issues:1. Eligibility for benefit under Notification No. 23/2003-C.E. under Sl. No. 1 of the Table.2. Interpretation of conditions specified in the notification and Foreign Trade Policy.3. Dispute regarding clearance of goods beyond permissible limit and applicability of concessional duty rates.Issue 1:The judgment revolves around determining the eligibility of the applicant, a Public Sector Undertaking engaged in the manufacture and export of iron ore pellets, for the benefit under Notification No. 23/2003-C.E. under Sl. No. 1 of the Table. The applicant claimed exemption of additional duty of customs for clearing goods into DTA in accordance with the provisions of Foreign Trade Policy. The dispute arose when the Revenue contended that the applicant did not fulfill the conditions specified in the notification.Issue 2:The crux of the matter lies in the interpretation of the conditions laid down in the notification and the Foreign Trade Policy. The applicant argued that they followed sub-paragraph (h) of Para 6.8 of the Policy, making them eligible for the benefit under Sl. No. 1 of the Table. On the other hand, the Revenue highlighted that the applicant did not meet the conditions specified in the notification, particularly in relation to the VAT exemption on goods cleared into DTA.Issue 3:A significant dispute arose regarding the clearance of goods beyond the permissible limit and the applicability of concessional duty rates. The Tribunal analyzed the provisions of the notification and the Foreign Trade Policy to determine the eligibility of the applicant for the concessional rate of duty. It was observed that the conditions for Sl. No. 1 and Sl. No. 2 of the Table of the notification are distinct, and there was no explicit restriction on availing the concessional rate under Sl. No. 1 beyond the permissible limit set by the Development Commissioner.In conclusion, the Tribunal found that the applicant had a prima facie case for waiver of pre-deposit of the duty amount along with interest and penalty. The judgment emphasized the importance of strict but reasonable interpretation of exemption notifications, ultimately ruling in favor of the applicant's eligibility for the benefit under Sl. No. 1 of the Table of the notification.