2018 (6) TMI 742 - AT - Customs

Tribunal rules no duty on High Speed Diesel for 100% EOU consumption, citing Finance Act exemptions.

Renfro India Pvt. Ltd. Versus Commissioner of Customs (Exp.), Nhava Sheva

The Tribunal set aside the duty demand on High Speed Diesel cleared by a 100% EOU, ruling that no duty is chargeable when goods are consumed within the ... 100% EOU - Goods consumed within EOU - levy of additional duty on the clearance of High Speed Diesel - N/N. 52/2003 dt. 31.03.2003 - Held that:- The duty demand is not sustainable as the goods were not cleared outside EOU. The Goods are consumed within the EOU and hence there is no reason to demand duty. Reliance placed in the case of STI INDIA LTD. VERSUS COMMISSIONER OF C. EX., INDORE [2007 (10) TMI 482 - CESTAT, NEW DELHI], where it was held that N/N. 59/99, dated 11-5-1999 exempts high speed diesel oil, falling under Heading No. 27.10 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1976), when imported into India, from so much of the additional duty leviable thereon under sub-section (1) of Section 3 of the said Customs Tariff Act, as is equivalent to the additional duty of excise leviable on high speed diesel oil under Section 133 read with Second Schedule of the Finance Act, 1999 (27 of 1999). Also, Section 116 (3) of Finance Act, 1999 not only provides exemption under Customs Act, 1975 but is also applicable in respect of additional duty levied under Section 116. Appeal allowed - decided in favor of appellant. Issues:1. Demand of additional duty on High Speed Diesel cleared by 100% EOU.Analysis:The case involved a 100% EOU clearing duty-free High Speed Diesel in 2004 under a specific notification. A Show Cause Notice was issued later demanding additional duty on the clearance of High Speed Diesel. The Adjudicating Authority confirmed a reduced demand, which was upheld by the Commissioner (Appeals), leading to the present appeal.The appellant argued that exemptions under the Finance Act, 1999 apply to duty chargeable under the Customs Tariff Act, 1975. They cited various judgments to support their position, emphasizing that no duty is chargeable when goods are consumed within the EOU.The Revenue, represented by the Assistant Commissioner, reiterated the findings of the impugned order.Upon review, the Tribunal found the duty demand unsustainable as the goods were not cleared outside the EOU and were consumed within it. They referenced precedent cases to support their decision, highlighting that no duty is chargeable in such circumstances. The Tribunal also noted that the EOU had executed a bond for any liability related to warehoused goods.Further, the Tribunal referred to a case where it was held that additional duty on High Speed Diesel is not applicable under the Finance Act, 1999. They emphasized that High Speed Diesel was exempted from payment of additional duty under specific notifications.In conclusion, the Tribunal set aside the impugned order and allowed the appeal based on the judgments and provisions cited, emphasizing that the issue was no longer open for debate. They also highlighted the exemption provided under the Finance Act, 1999 for additional duty on High Speed Diesel.The judgment was pronounced in court on 8.6.2018, with detailed references to legal provisions and past decisions supporting the final decision.