TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Supreme Court clarifies duty levy on finished goods from Export Unit</h1> <h3>SIV INDUSTRIES LTD. Versus COMMISSIONER OF CENTRAL EXCISE & CUSTOMS</h3> SIV INDUSTRIES LTD. Versus COMMISSIONER OF CENTRAL EXCISE & CUSTOMS - 2000 (117) E.L.T. 281 (SC), 2000 AIR 1153, 2000 (2) SCR 231, 2000 (3) SCC 367, 2000 ... Issues Involved:1. Applicability of Section 3(1) vs. Proviso to Section 3(1) of the Central Excises and Salt Act, 1944.2. Interpretation of 'allowed to be sold in India' under the proviso to Section 3(1).3. Conditions for debonding from 100% Export Oriented Unit (EOU) Scheme.4. Assessment of duties on finished goods upon debonding.Issue-wise Detailed Analysis:1. Applicability of Section 3(1) vs. Proviso to Section 3(1) of the Central Excises and Salt Act, 1944:The primary contention was whether the excise duty on the finished goods should be levied under the main Section 3(1) of the Act or under the proviso to Section 3(1). The appellant argued that excise duty should be payable under the main Section 3(1) along with customs duty on the imported raw materials used in the manufacture of finished goods. In contrast, the Revenue contended that the duty should be levied under the proviso to Section 3(1) without any customs duty on the raw materials.2. Interpretation of 'allowed to be sold in India' under the proviso to Section 3(1):The expression 'allowed to be sold in India' was the bone of contention. The appellant argued that for the proviso to apply, two conditions must be cumulatively satisfied: (1) the goods should have been produced or manufactured by an existing 100% EOU, and (2) these goods should have been allowed to be sold in India. The Revenue, however, assumed that permission to debond equated to permission to sell in India, which the court found to be an overreach.3. Conditions for Debonding from 100% Export Oriented Unit (EOU) Scheme:The appellant was granted permission to set up a 100% EOU and later sought debonding. The debonding was subject to conditions such as payment of all customs and excise duties on imported and indigenous capital goods, raw materials, components, consumables, and spares in stock, as well as on the finished goods in stock. The appellant complied with these conditions and paid the demanded duties, which amounted to Rs. 6,62,70,540.76.4. Assessment of Duties on Finished Goods Upon Debonding:The dispute centered on the rate at which duty was to be levied on the finished goods manufactured before the date of debonding. Initially, the Assistant Collector of Central Excise demanded duty under the main Section 3(1), but later issued a show cause notice demanding duty under the proviso to Section 3(1). The Tribunal upheld the Revenue's contention, but the Supreme Court disagreed, stating that the proviso to Section 3(1) applies only to sales made up to 25% of production by 100% EOU in DTA with permission from the Development Commissioner, not to the finished goods lying in stock at the time of debonding.Conclusion:The Supreme Court concluded that the Tribunal erred in applying the proviso to Section 3(1) for the duty on the finished goods. The court restored the order of the Collector of Central Excise, which aligned with the appellant's contention that duty should be levied under the main Section 3(1) of the Act. The appeal was allowed, and no costs were ordered.
TaxTMI 