2013 (7) TMI 375 - AT - Central Excise

CESTAT Upholds Duty Rates for 100% EOU Post-Amendment, Extends Demand Period

The CESTAT upheld the duty rates post-amendment for a 100% EOU, noting discrepancies in arguments regarding deemed exports. The extended period for demand ... Penalty - Extended period of limitation - Received raw materials from units who availed deemed exports facility under paragraphs 8.3(a) and (b) of the Foreign Trade Policy (FTP) - Determination of rate of duty - Appellant continued to pay duty as per Sr. No. 3 of Notification No. 23/2003-CE dated 31.03.2003 even after amendment by Notification No. 29/2007-CE dated 06.7.2007 - The supplied raw materials under paragraph 8.3(a) and (b) of the Foreign Trade Policy have to be treated as imported goods and duty at the rates applicable from time to time under serial No. 2 of the Notification No. 23/2003-CE dated 31.3.2003, required to be made applicable. Held that:- So far as imposition of penalties upon the appellants - it has been prima facie brought out that Appellant had no knowledge of the fact that GHCL were availing deemed export facility under Para 8.3(a) and (b) of FTP. Appellants have thus made out a good case for non imposition of penalties under Rule 25 and 26 of the Central Excise Rules - Aappellant is directed to deposit the entire differential duty liability along with interest. Subject to the payment of above deposit, there shall be stay on the remaining amounts of penalties till the disposal of appeals. Limitation - show cause notice was issued within one year of the date of debonding. - Held that:- Since the PC are a 100% EOU, demands can be raised as per the provisions of the B-17 bond executed by them. As per this bond, there is no time limit for demanding duty in the case of short payment by an EOU – In the case before CESTAT, even the B-17 bond was not invoked by Commissioner but in the instant case before us, B-17 bond has been invoked both in the show cause notice as well as the adjudicating order. Accordingly, first appellant has, prima facie, no case on time bar. - Decision in Endress + Hauser Flowtec (I) Pvt Limited vs. CCE, Aurangabad [2008 (11) TMI 159 - CESTAT, MUMBAI] distinguished - Decided against the assessee. Issues involved:Stay applications filed against the order confirming demand, differential duty, and penalties under Central Excise Act, 1944. Issues include the application of duty rates post-amendment, limitation period for demand, and imposition of penalties.Analysis:1. Duty Rates Post-Amendment:The issue revolves around the duty liability of the first appellant, a 100% EOU, for receiving raw materials under deemed exports facility. The Revenue contends that duty rates under Notification No. 23/2003-CE were applicable post-amendment in 2007. The appellant disputes the applicability of the amended rates and challenges the corrigendum changing the duty amount. The CESTAT observed the appellant's prompt payment of differential duty initially but noted discrepancies in subsequent arguments regarding the supplier's deemed export facility under the Foreign Trade Policy.2. Limitation Period for Demand:The first appellant argues against the invocation of the extended period for demand, citing timely disclosure of facts and the absence of prior knowledge regarding the supplier's benefits under the Foreign Trade Policy. The CESTAT refers to the B-17 bond executed by the appellant, allowing duty demands without a time limit in cases of short payment by a 100% EOU. The tribunal upholds the invocation of the bond by the Commissioner, rejecting the appellant's limitation defense.3. Imposition of Penalties:Regarding penalties under Rule 25 and 26 of the Central Excise Rules, the appellants claim lack of prior knowledge about the supplier's deemed export benefits. The CESTAT acknowledges the appellants' case for non-imposition of penalties due to the absence of evidence indicating their awareness. The tribunal directs the deposit of the differential duty liability within a specified timeframe, with a stay on the remaining penalties pending appeal disposal.In conclusion, the judgment addresses the duty rate application post-amendment, the limitation period for demand based on the executed bond, and the imposition of penalties considering the appellants' lack of prior knowledge. The CESTAT's decision emphasizes compliance with the differential duty liability deposit while granting a stay on the penalties pending further proceedings.