Tribunal affirms duty payment for 100% E.O.U. units; emphasizes notification over circulars

SANDUR LAMINATES LTD. Versus COMMISSIONER OF CENTRAL EXCISE, BELGAUM

SANDUR LAMINATES LTD. Versus COMMISSIONER OF CENTRAL EXCISE, BELGAUM - 2005 (190) E.L.T. 109 (Tri. - Bang.) Issues:
Interpretation of Notification No. 2/95 - Payment of duty by 100% E.O.U. for goods cleared to D.T.A. on the basis of EXIM Policy 1997-2002 and Board's Circular No. 42/97.

Analysis:

The case involved two appeals against Order-in-Appeal No. 471/2002-CE, dated 30-7-2002. The appellants, a 100% E.O.U., cleared goods to the Domestic Tariff Area (D.T.A.) by paying 50% of the Customs duty as per Notification No. 2/97. However, the notification provides exemption to excisable goods produced in 100% E.O.U. units when sold in India under specific conditions, which were not met by the appellants. The Revenue demanded duty, leading to appeals to the Commissioner (Appeals) challenging the impugned order-in-appeal.

During the proceedings, the appellants argued that they started paying only 50% duty based on a Board's Circular No. 42/97, which clarified that the rate of duty for D.T.A. under different options is the same. They highlighted the lack of clarity from the Department on the issue despite seeking clarification. On the other hand, the Revenue contended that the Notification was clear, and the Order-in-Appeal should be upheld.

The Tribunal carefully examined the case records and noted the conflict between the Board's Circular and the Notification. Despite the Circular allowing for 50% duty payment, the Notification specifically excluded such clearances under the EXIM policy. The Tribunal emphasized that the notification holds legal sanctity, and in case of conflict, the notification prevails over circulars. The appellants were advised to seek clarification from the Government regarding the Circular. Consequently, the Tribunal upheld the Order-in-Appeal and dismissed the appeals of the appellants.

In conclusion, the judgment focused on the interpretation of Notification No. 2/95 concerning the duty payment by 100% E.O.U. units for goods cleared to D.T.A. The Tribunal emphasized the legal significance of notifications over circulars in cases of conflict, ultimately leading to the dismissal of the appeals due to the appellants' failure to meet the conditions specified in the notification.