2010 (5) TMI 278 - AT - Customs

Tribunal rules in favor of appellant on excise duty exemption eligibility and retrospective notification application.

The Tribunal allowed the appeal, ruling in favor of the appellant on the eligibility for exemption under Notification No. 3/2001-C.E., the calculation of ... EOU - Appellant is a 100% EOU. During the period from January 2001 to September 2001, appellant had manufactured plastic agglomer out of imported plastic waste and scrap. The dispute has arisen as to whether appellant is eligible for exemption under Notification No. 3/2001-C.E. dated 1-3-2001 (Sl. No. 73) in respect of their clearances to domestic tariff area. Held that - It has to be noted that the 1 explanation was added by issue of Notification No. 48/2001 in October 2001 whereas both these decisions of the High Courts were rendered in the year 2000. The notification as it existed prior to introduction of explanation was interpreted while considering and quashing the Circular No. 38/2000 by two High Courts. Therefore obvious conclusion that emerges is that even though the explanation starts with the clause 'for the removal of doubts it is hereby clarified' it cannot have retrospective effect. Issues:1. Eligibility for exemption under Notification No. 3/2001-C.E.2. Calculation of excise duty for 100% EOU clearances to domestic tariff area.3. Retrospective application of amendment in Notification No. 48/2001-C.E.Eligibility for Exemption under Notification No. 3/2001-C.E.:The case involved a dispute regarding the eligibility of a 100% EOU for exemption under Notification No. 3/2001-C.E. for clearances to the domestic tariff area. The appellant had manufactured plastic agglomer out of imported plastic waste and scrap, leading to a duty demand confirmation by the lower authorities. The advocate for the appellant argued that the plastic material manufactured should be eligible for exemption as they had imported waste and scrap. Citing relevant case laws, the advocate contended that the appellant should not be liable to pay CVD for excise duty calculation. The Department's stand was that CVD must be added to determine excise duty payable. The Tribunal considered the submissions and relied on the decision of the Hon'ble High Court of Delhi in a similar case, ultimately allowing the appeal based on the High Court decisions.Calculation of Excise Duty for 100% EOU Clearances to Domestic Tariff Area:The debate centered on whether excise duty for 100% EOU clearances to the domestic tariff area should be based on customs duty payable on like goods imported. The Department argued that CVD should be added to calculate excise duty. While the Department's stance was supported by lack of contrary decisions, the advocate for the appellant relied on case laws to counter this argument. The Tribunal considered the High Court decisions and concluded that the explanation in the notification could not have retrospective effect, ultimately allowing the appeal based on the High Court interpretations.Retrospective Application of Amendment in Notification No. 48/2001-C.E.:The issue of retrospective application of an amendment in Notification No. 48/2001-C.E. was raised during the proceedings. The advocate for the appellant argued that the amendment, clarifying that exemption shall not be available to 100% EOU, should not be applied retrospectively. Citing relevant case laws and the Tribunal's decision in a similar case, the advocate contended against the retrospective application of the amendment. The Tribunal, considering the High Court decisions and the timing of the notification and interpretations, allowed the appeal based on the non-retrospective effect of the amendment.In conclusion, the Tribunal allowed the appeal, considering the eligibility for exemption under Notification No. 3/2001-C.E., the calculation of excise duty for 100% EOU clearances to the domestic tariff area, and the retrospective application of the amendment in Notification No. 48/2001-C.E. based on relevant case laws and interpretations by the High Courts.