TaxTMI 
TaxTMI 
2009 (8) TMI 490
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....7 and Dec., 2007 to 22-6-2008 respectively. These demand notices have been issued on the ground that the appellant has violated the conditions of the Notification No. 23/2003-C.E., dated 31-3-2003 read with Para 6.8 of the Foreign Trade Policy (2004-09). Further, the notices have alleged that they were also not preparing any central excise invoice as required under Rules 17(1) of CER for clearance of their final product in DTA and were also not showing the details of production and clearance in the monthly return (ER-2) in terms of Rule 17(3) of the Rules. In the present case, the appellant cleared 'fresh mushrooms' falling under heading 0709 of the First Schedule to the CE Tariff valued at Rs.4,73,42,782/- and Rs.3,73,07,029/- into the DTA during the period from Dec, 2006 to Nov, 2007 and Dec, 2007 to 22-6-2008 respectively, without payment of duty. The detailed reply and submissions were made by the appellant before the Commissioner and considering their submissions and also after extending the opportunity of personal hearing, the Commissioner confirmed the demands against the appellant and imposed interest and penalty, mentioned supra. 3. We have heard both sides and consider....
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....he Domestic Tariff Area (DTA) on payment of duties as applicable to sale under paragraph 6.8(a) on prior intimation to the Customs authorities. Such sales shall be counted against DTA sale entitlement. Sale of rejects upto 5% of FOB value of exports shall not be subject to achievement of NFE. (e) ..………….. (f) ..………….. (g) ..………….. (h) EOU/EHTP/STP/BTP units may sell finished products, which are freely importable under the Policy in the DTA under intimation to the Development Commissioner against payment of full duties provided they have achieved the positive NFE. (i) ..………….. (j) In case of DTA sale of goods manufactured by EOU/EHTP/STP/BTP, where basic duty and CVD is Nil, such goods may be considered as non-excisable for the purpose of payment of duty. 4. (a). The Ld. Counsel on behalf of the applicant herein, at the outset, submitted that the impugned goods, which had been cleared in DTA, are not excisable as the entry in the CE Tariff under heading 0709 mentions NIL rate of duty. He further took us to the definition of "excisable goods" provided under Section 2(d) of the Act, which reads as follows: "goods specified in the....
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....on on the judgment on the ground that the said judgment has dealt the issue regarding exemption being granted under Rule 8 of the Central Excise Rules, 1944, whereas, in the present case the tariff rate is NIL. For the sake of our satisfaction and for not admitting this contention of Ld. Counsel, we reproduce paras 21, 22 and 23 of the said judgment of Hon'ble Punjab & Haryana High Court as under: "27. The same view was taken by Karnataka High Court in Karnataka Cement Pipe Factory Industrial Estate v. Superintendent of Central Excise and another, 1986 (23) E.L.T. 313 (Karnataka). In this decision, the learned Judge explained some of the at authorities in which a contrary view had been taken and relied on the decisions of High Courts of Madras, Andhra Pradesh and Delhi. It was held that character of a product, as excisable goods, does not depend upon the actual levy of duty, but depends upon the description as excisable goods as contained in the First Schedule to the Act. It was pointed out that the First Schedule to the Act gives description of the goods which are excisable and the rate of duty. It was further pointed out that it was significant that in respect of some of the g....
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....an that the duly must be imposed in order to make the goods excisable goods. "....................... (b) Ld. SDR has also submitted the following decisions of Hon'ble Supreme Court to argue that the goods are excisable goods the moment they are specified in the Schedules to the Central Excise Tariff, irrespective of duty chargeable being Nil or exempted. (i) Wallace Flour Mills Company Ltd. v. CCE [1989 (44) E.L.T. 598 (S.C.)] (ii) Moti Laminates Pvt. Ltd. v. CCE, Ahmedabad [1995 (76) E.L.T. 241 (S.C.)] (iii) CCE, Hyderabad v. Vazir Sultan Tobacco Co. Ltd. [1996 (83) E.L.T. 3 (S.C.)] (c) It was also pointed out by the Ld. SDR that the impugned DTA clearance of the goods is governed by Para 6.8 of the Policy. He specifically took us to Para 6.8 (j) wherein the 'non excisable' goods have been defined as follows: "In case of DTA sale of goods manufactured by EOU/EHTP/STP/BTP, where basic duty and CVD is nil, such goods may be considered as non-excisable for the purpose of payment of duty". (d) We also find that the adjudicating authority in his order at para 34(1)(e) has specifically mentioned the same. Admittedly, basic customs duty leviable on the impugned good....
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....t under a deeming provision created under proviso to Section 3(1) of the Act, which simply requires that any excisable goods cleared from the EOU in DTA shall suffer duties but measure shall be of Customs duties. Admittedly, the Central Excise duty on normal manufacture of such goods by units other than EOU is nil. The Revenue's case is not for demanding duty under the main provision of Section 3(1) ibid. The case law cited supra and Board's Circulars referred to above by the ld. Counsel are not applicable in the present case as none of these relate to the goods produced by EOU and cleared in DTA. We have already held that impugned goods are 'excisable goods' and, therefore, we further hold that their clearance in DTA shall be governed by proviso to Section 3(1) ibid. It is submitted by the Ld. SDR that fiction created by law should be given full effect. He supported this argument by referring to decision of the Apex Court in the case of Jalyan Udyog [1993 (68) E.L.T. 9 (S.C.). Therefore, we do not find any merit in the submission of the Ld. Counsel. 6. The Ld. Counsel has submitted that the identical issue was decided earlier by the Commissioner (Appeals) vide Order-in-Appeal N....
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....s taken us to the violation of the conditions of the Notification 23/2003-C.E. to the extent that they have cleared the excisable goods in DTA much more than their entitlement (50% of FOB value of exports) and has not fulfilled the condition of positive NFE (Net Foreign Exchange) (as reflected at Page 128 of the appeal paperbook of the appellant). This has led to the violation of Para 6.8(a) of the EXIM Policy also. The Ld. Counsel has submitted that the condition of positive NFE has been fulfilled for the block of years 2002-03 to 2006-07, as it has to be taken cumulative NFE for the whole block of 5 years in terms of Para 6.5 of EXIM Policy, even if it was negative for the year 2006-07. But, we find that there is no scope for advancing the same argument for the period 2007-08 and 2008-09 (upto 22-6-2008) as for this block admittedly there is negative NFE as submitted by the applicant/appellant in the said document at page 128 of the appeal paperbook. In his written submissions, the Ld. SDR demonstrated the violation of the conditions of the Notification as follows, on the basis of their APR (Annual Performance Report) submitted. We reproduce the applicants' export performance, en....
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....above table for the block 2007-08 and onwards (upto 22-6-08), the cumulative NFE is negative. Therefore, any DTA sale has to suffer the full rate of duty without any concession. Otherwise also, the DTA sale as shown above is far exceeding their entitlement (even if NFE is ignored). We, thus, find that the demand for this period is also sustainable. 9. The Development Commissioner's debonding order in no way shall preclude the Revenue from demanding its dues as per law for violating the conditions of the exemption notification, as the DTA clearances in the present case are subject to fulfillment of the conditions of the Notification No. 23/2003-C.E., dated 31-3-2003. We have already held that the conditions of notification have been violated in this case. 10. At the end, the ld. Counsel strongly tried to make out a case of financial hardship for waiver of the confirmed duties and penalty on the basis of Annual Report submitted for the financial years 2006-07 and 2007-08 pleading that there has been huge accumulation of losses right from the period 1998-99. We have perused the assessment order of the Income tax authorities dated 23-12-2008 (page 99 to 102 of appeal paper book),....