https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=767391 https://www.taxtmi.com/caselaws?id=767391 100% Export Oriented Unit (EOU) - liability to pay duty on inputs used in the manufacture of final products cleared in the Domestic Tariff Area (DTA) without payment of duty - violation of N/N. 52/2003-Cus dated 31.03.2003, without invoking Section 28 of the Customs Act, 1962, or Section 11A of the Central Excise Act, 1944 - invocation of extended period of limitation. Whether the appellant is liable to pay duty on the inputs utilised in the manufacture of the final products which are cleared under DTA without payment of duty availing the benefit of various exemption notifications? - HELD THAT:- In view of the N/N. 52/2003-Cus dated 31.03.2003, since the goods have been cleared under DTA without payment of duty, the observation of the Commissioner that duty foregone on the inputs utilized in the manufacture of the above exempted products has to be discharged by the appellant needs to be sustained. The claim of the counsel that they fall under the main clause of the notification and the question of reading the proviso into the main clause cannot be accepted in view of the fact that the proviso to the main clause has to be necessarily read with the main clause which brings in certain restrictions in the situations referred in the main clause. The Hon ble Supreme Court in the case of Union of India vs. VKC Footsteps India Pvt. Ltd. [ 2021 (9) TMI 626 - SUPREME COURT] while dealing with the interpretation of the proviso to Section 54(3) oof the CGST Act observed that Rule 89(5) is consistent with Section 54(3) of the CGST Act. Thus, there are no reason to accept the contention of the learned counsel that the proviso is independent of the main clause para 3 of the Notification 52/2003. Whether the provisions of conditions of notification 52/2003 can be invoked to demand the duty when these conditions are violated without invoking Section 28 of the Customs Act, 1962 or Section 11A of Central Excise Act, 1944? - HELD THAT:- The Supreme Court of India in the case of Moser Baer India Ltd. vs. Commissioner of Customs, Noida [ 2015 (11) TMI 137 - SUPREME COURT] while dealing with invocation of extended period in terms of the bond executed by an 100% EOU observed that the goods are used for the purpose for which they are imported. If the perception of the Revenue was that these are not captive goods or the benefit of Notification No. 53/97 is not available to the assessee, the period of limitation started at the threshold and therefore, on the facts which were known to the Revenue the Show Cause Notice could have been issued within a normal period of limitation prescribed under Section 28 which was six months at the relevant time. Thus, there is no question of violation of any of the conditions of the Notification since they had legitimately availed the benefit of the exemption Notifications. This aspect was known to the department and hence, the question of invoking extended period does not arise. Since the show-cause notice was issued on 11.05.2011, the demand for the normal period alone is to be sustained. Conclusion - i) The demand for duty on inputs used in the manufacture of goods cleared in DTA without payment of duty upheld. ii) The duty demand on inputs for the normal period upheld, rejecting the extended period invocation. Appeal allowed in part. Case-Laws Central Excise Wed, 12 Mar 2025 00:00:00 +0530