2000 (9) TMI 508 - AT - Central Excise

Exclusion of Deemed Exports from Total Clearances under Notification No. 1/93-C.E.

The Tribunal held that Deemed Exports should not be included in the calculation of total clearances under Notification No. 1/93-C.E. The absence of ... Computation of aggregate value of clearances under Notification No. 1/93-C.E. - Clearances for home-consumption - Deemed Exports treated as exports by deeming fiction - Interpretation by omission/non-mentionComputation of aggregate value of clearances under Notification No. 1/93-C.E. - Deemed Exports treated as exports by deeming fiction - Clearances for home-consumption - Interpretation by omission/non-mention - Whether the value of goods cleared under the Deemed Export scheme must be included in the aggregate value of clearances for computing benefit under Notification No. 1/93-C.E. - HELD THAT: - The Tribunal referred to the definition of Deemed Exports in Chapter X of the Export-Import Policy, which treats such transactions-although the goods do not leave the country and payment is received in India-by a deeming fiction as equivalent to exports for certain purposes. Notification No. 1/93, however, expressly refers to excisable goods cleared for home-consumption and specifically includes outward supplies to Nepal and Bhutan for aggregate computation; it contains no provision including Deemed Exports within clearances for home-consumption. In the absence of any definition of Deemed Exports in the Central Excise law and no express inclusion of Deemed Exports in Notification No. 1/93, the correct interpretative approach is that omission or non-mention indicates the legislature did not intend to include Deemed Exports for the purpose of computing aggregate clearances under that Notification. Consequently, Deemed Exports, though given export-like benefits by a separate deeming provision, are not to be equated with clearances for home-consumption for the narrow purpose of calculating entitlement under Notification No. 1/93, and their value need not be added to the aggregate clearances.Value of Deemed Exports was not required to be included in the aggregate value of clearances for computing benefit under Notification No. 1/93; the impugned order is set aside and the appeal is allowed.Final Conclusion: The Tribunal held that Deemed Exports, although placed on an export-equivalent footing by the Export-Import Policy, are not included within the expression 'clearances for home-consumption' under Notification No. 1/93 by virtue of non-mention; therefore the value of Deemed Exports need not be included when computing aggregate clearances under that Notification, and the appeal was allowed with consequential reliefs. Issues:Interpretation of Notification No. 1/93-C.E. for computation of Central Excise duty regarding goods cleared under Deemed Export Scheme.Analysis:The appellants, engaged in manufacturing Alumina Bells, Rings, etc., availed benefits under Notification No. 1/93 as an S.S.I. Unit. A show cause notice was issued, demanding duty for not including the value of goods cleared under Deemed Export Scheme in the total clearance value for duty determination. The Revenue argued that Deemed Exports should be treated as clearances for home consumption, leading to the impugned Orders.The appellants contended that Deemed Exports cannot be equated with clearances for home consumption as they are considered exports and are not specifically mentioned in Notification 1/93. The Revenue argued that Deemed Exports are not defined in the Central Excise Act, and thus, should not be treated as exports for computation purposes under the Notification.The Tribunal analyzed the submissions and focused on determining whether the value of Deemed Exports should be considered while calculating the total value of clearances under Notification No. 1/93-C.E. Referring to Chapter X of Deemed Exports, it was noted that Deemed Exports are transactions where goods supplied do not leave the country but are treated as exports for benefit purposes by law. The Tribunal found that Deemed Exports were not specifically mentioned in Notification 1/93, unlike exports to Nepal and Bhutan, indicating that the absence of mention favored the assessee.Consequently, the Tribunal concluded that the value of Deemed Exports should not be added when computing the clearances' value under the Notification. The impugned Order was set aside, and the appeal was allowed in favor of the appellants, granting consequential reliefs.