2018 (4) TMI 1026 - AT - Central Excise

Tribunal Upholds Commissioner's Order on Customs Duty Recovery Appeal

The Tribunal upheld the Commissioner's order, dismissing both Revenue's and assessee's appeals regarding the demand notice for recovery of customs duty on ... 100% EOU - Valuation - clearance of 765539.74 L. Mtrs of processed MMF without payment of duty - whether proviso to Section 3(1) of CEA, 1944 will be applicable or Section 3(1) of CEA 1944 would be applicable? - Held that: - Since the present case is for the period after 11.05.2001, the issue is settled against the assesee by the judgment of this Tribunal in the case of Maral Oveseas Ltd. [2016 (4) TMI 771 - CESTAT NEW DELHI], where it was held that it is not legally tenable to argue that the rate of duty applicable to a normal Central Excise Unit should be applicable to a E.O.U. even before the E.O.U. becomes a normal Central Excise Unit - demand set aside. Demand of duty on raw materials - Held that: - the issue is covered by the judgment of this Tribunal in the case of Aisa Metals vs CCE & ST Ahmedabad [2015 (4) TMI 69 - CESTAT AHMEDABAD], where the demand has been set aside - demand set aside. Appeal dismissed - decided against Revenue. Issues:Two appeals filed by Revenue and assessee challenging the same order passed by Commissioner of Central Excise, Surat-I.Analysis:The case involved two appeals filed by the Revenue and the assessee challenging the same order passed by the Commissioner of Central Excise, Surat-I. The matter was listed on multiple occasions, but the assessee did not appear nor requested an adjournment. The facts of the case included discrepancies in the stock of finished goods of the assessee, leading to a demand notice for recovery of customs duty. The Ld. Commissioner (Appeals) partly allowed the appeal by setting aside the demand on raw materials but confirmed the duty on finished goods cleared clandestinely without payment. The Revenue challenged the setting aside of the demand on raw materials, while the assessee contested the method of duty calculation under Section 3 of CEA, 1944.The Revenue argued that the demand on raw materials and finished goods can be sustained simultaneously against the assessee, a 100% EOU. The Ld. AR for the Revenue referred to relevant judgments to support their position on the computation of duty. The assessee did not dispute the clearance of finished goods without payment of duty but contested the computation of the demand, arguing that the proviso to Section 3(1) of CEA, 1944 should not be applicable to their case. The Tribunal referred to the Supreme Court's judgment in Sarla Performance Fibers Ltd. case to determine the applicability of the provisions.Upon analysis, the Tribunal found that the principle laid down by the Supreme Court applied only to cases covered under the un-amended provisions of Section 3(1) of the CEA, 1944, i.e., before 11.05.2001. As the present case pertained to a period after the amendment, the issue was settled against the assessee based on previous Tribunal judgments. The Tribunal upheld the impugned order, dismissing both the Revenue's and the assessee's appeals. The judgment highlighted the applicability of specific legal provisions and previous case law to determine the outcome of the appeals.