2019 (7) TMI 1799 - AT - Central Excise

Tribunal Upholds Order for Assessee, Rejects Revenue Appeal

The Tribunal upheld the Order-in-Original, ruling in favor of the assessee and rejecting the appeal filed by the Revenue. It was determined that the ... 100% EOU - eligibilty for DTA sale - maximum permissible limit for export - It is the case of the appellant department that the respondent assessee was eligible for DTA sale up to a maximum limit of 50% of the FOB value of their export - N/N. 23/2003-CE dated 31.03.2003 - HELD THAT:- It is observed that for yarn of jute and goods of jute condition No.10 is applicable. Condition No.10 says “if the goods are manufactured wholly from indigenous raw materials”. Correspondences available on record show that permission of DTA clearances was given under para 6.8 (k) of FTP 2004-2009 which required them to restrict these clearances up to 50% of the FOB value of their export. Two letters dated 16/11/06 and 27/06/07 of Development Commissioner addressed to the noticees are available on case record which show that DTA clearance was given in term of 6-8 (K) - The noticee however dispute this allegation on the ground that the condition envisaged in para 6.8(k) was not at all applicable to them in as much their claim to make DTA clearance of jute yarn was covered under another condition under para 6.8(h) which did not require them to limit their DTA clearance but instead required achievement of positive NFE. In support of their claim they have produced copies of their letters dated 10/05/2007, 02/07/2007, 04/0707 and 30/0707 addressed to development commissioner claiming thatsince they had achieved positive NFE they would be covered under para 6.8 (h). I find that copies of some of these letters are also marked to department. It is found that department too accepts that para 6.18(e) condition has been fulfilled implying that the notices had achieved positive NFE and as such their claim that their DTA clearances were fully consistent and compliant with the provisions contained in para 6.8 (h) is liable to be accepted - exemption under notification No.23/03 dated 01/03/03 can be denied only if it shown that they have violated FPT conditions. The, notice have however proved that they have complied with its conditions and were not required to restrict their DTA clearances vis a vis their export. There is no allegation in the notice that for manufacturing jute yarn they used as imported raw materials. There are no ambiguity in the impugned order - appeal dismissed - decided against Revenue. Issues involved:1. Failure to mention evidence of achieving positive NFE by the assessee in the Order-in-Original.2. Discrepancy in the permission obtained for DTA sale and actual DTA sale conducted by the assessee.3. Applicability of concessional rate of duty under Notification No.23/2003-CE.4. Allegation of suppression of facts by the assessee in their monthly ER-1 returns.Analysis:1. The appeal was filed by the Appellant Revenue against the Order-in-Original dated 27 March 2009, which was reviewed on 10 July 2009. The grounds of appeal included the failure of the Adjudicating Authority to mention evidence of the assessee's achievement of positive NFE. The department sought setting aside of the Order-in-Original and remanding the matter for a fresh order due to this omission.2. Another ground of appeal was the discrepancy in the permission obtained from the Development Commissioner for DTA sale under Para 6.8(k) of FTP 2004-09 and the actual DTA sale conducted under Para 6.8(h). The department questioned whether any verification was conducted to ensure compliance with the correct procedure for DTA sale, as claimed by the assessee.3. The department contended that the concessional rate of duty under Notification No.23/2003-CE was not applicable to the assessee as they did not clear goods to DTA following the provisions of FTP 2004-09. It was argued that the goods cleared to DTA should attract duty equivalent to Customs duties without the benefit of exemption provided in the notification.4. The department alleged that the assessee suppressed facts by not reflecting the amount of DTA sale and export sale in their monthly ER-1 returns submitted to the Central Excise authorities. This was considered as a form of concealment of information relevant for duty assessment.5. The Tribunal observed that the impugned order had thoroughly analyzed the case, considering written and oral submissions by the parties. The order highlighted the dispute regarding the applicable condition for DTA clearance and the evidence provided by the assessee to support their compliance with the relevant provisions of FTP 2004-09.6. The Tribunal upheld the impugned order, noting that the assessee had fulfilled the conditions required for DTA clearances under Para 6.8(h) of FTP 2004-09. It was concluded that the exemption under Notification No.23/2003-CE could not be denied as the assessee had demonstrated compliance with FTP conditions, thereby rejecting the appeal filed by the department.7. In conclusion, the Tribunal rejected the appeal filed by the department, affirming the sustainability of the impugned order.