2012 (12) TMI 226 - AT - Central Excise

Appeal Dismissed: Deemed export treated same as physical export in DTA sale calculation. Precedents crucial.

The Tribunal rejected the Revenue's appeal regarding the calculation of entitlement of DTA sale under the Exim Policy, determining that deemed export ... Deemed export equivalent to physical export - entitlement of DTA sale - Development Commissioner\'s permission - FOB value for DTA quota - binding precedent of higher forumDeemed export equivalent to physical export - entitlement of DTA sale - FOB value for DTA quota - Development Commissioner\'s permission - Whether deemed exports must be excluded and only physical exports taken into account for calculating the entitlement of DTA sale under the Exim Policy and related notifications. - HELD THAT: - The Tribunal examined earlier decisions of the Tribunal and higher courts relied upon by the Commissioner, including decisions in Amitex Silk Mills Pvt. Ltd., Ginni International Ltd., and the Hon'ble Supreme Court and the Gujarat High Court (Shilpa Copper Wire Industries), and found those precedents applicable. The Tribunal noted that where the Development Commissioner has granted a 100% EOU permission to sell in DTA up to a specified value, Revenue cannot, for the purpose of fixing that limit, exclude deemed exports and consider only physical exports. Although the Revenue relied upon later Tribunal decisions (e.g., Jumbo Bag Limited), the order observed that such later decisions did not take note of the authoritative High Court and Supreme Court precedents. Having regard to the binding decisions of the higher forums, the Tribunal held itself bound to follow these precedents and upheld the conclusion that deemed exports are to be treated consistently with the earlier rulings for the purpose of determining DTA sale entitlement (measured against FOB-related permission), thus supporting the Commissioner's decision to drop proceedings under the show cause notice. [Paras 6, 7]The appeal by Revenue is without merit and is rejected; deemed exports are not to be excluded for the purpose of calculating DTA sale entitlement where precedential permissions and rulings apply.Final Conclusion: Following binding decisions of the Supreme Court and the Gujarat High Court, the Tribunal rejected Revenue's appeal and upheld the Commissioner\'s order dropping proceedings, holding that earlier precedents govern the treatment of deemed exports for calculating DTA sale entitlement and that Revenue cannot override Development Commissioner\'s permission by excluding deemed exports. Issues:1. Whether deemed export is equivalent to physical export for the calculation of entitlement of DTA sale in terms of Exim Policy.Analysis:The impugned order in this case was passed following the directions in the remand order of the Tribunal. The Commissioner had dropped the proceedings initiated by a show cause notice, leading to the Revenue filing an appeal. The main issue revolved around whether deemed export should be considered equivalent to physical export for the calculation of entitlement of DTA sale in accordance with the Exim Policy.The Commissioner based the decision on various precedents, including decisions from the Tribunal, the Hon'ble Supreme Court, and the High Court of Gujarat. The Revenue challenged the order on grounds related to the definition of import and export under the Foreign Trade (Development and Regulation) Act, 1992, and Circular F.No. 305/48/2000-FTT. Additionally, the Revenue cited Tribunal decisions in support of their arguments.After hearing both parties, the Tribunal analyzed the submissions and noted the conflicting decisions. The Tribunal emphasized the importance of following decisions from higher forums, such as the Hon'ble Supreme Court and the High Court of Gujarat. The Tribunal highlighted the relevance of specific decisions, including those related to the permission granted to a 100% EOU for DTA sales and the consideration of deemed exports in fixing limits.Ultimately, the Tribunal found no merit in the Revenue's appeal based on the precedent decisions applicable to the case. As a result, the appeal filed by the Revenue was rejected, aligning with the established legal principles and interpretations provided by higher judicial forums.This detailed analysis of the judgment showcases the thorough consideration of legal precedents and interpretations that guided the Tribunal's decision on the issue at hand.