TaxTMI 
TaxTMI 
2010 (9) TMI 13
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....this common judgment. In order to comprehend the controversy in these appeals, a brief reference to the facts in Civil Appeal Nos.4608-4609 of 2005, which was treated as the lead case, would suffice: The assessee company is engaged in the production of shrimps and tiger prawns, falling under Chapter Sub Heading No. 0301.00 of the Schedule to the Central Excise Tariff Act, 1985 (for short "the Tariff Act"). They imported some capital goods, viz. sand blowers and air filters, duty free under Customs Notification Nos. 188/93 dated 27th December 1993 and 196/94 dated 8th December 1994 for use in their integrated Aquaculture project. The imports were subject to the condition that the said goods would be used in the production of aquaculture products and 100% or such other percentage of the said products, as may be fixed by the Board of Approvals for 100% EOU, shall be exported out of India for a period of ten years or such extended period as may be specified by the said Board. 3. As per the Exim Policy (1st April 1992 to 31st March 1997), an EOU Aqua culture unit was permitted to sell upto 50% of its production in value terms in DTA, in accordance with the DTA sales guidelines not....
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....ner of Central Excise and Customs, Visakhapatnam, vide Order-in-Original No. 9/99 dated 15th April 1999, demanded a duty of 4 Rs.1,83,46,493/- on the shrimp seeds, shrimps and fish, cleared by the assessee, under proviso to Section 11A of the Act. Interest at 20% was demanded on Rs.1,13,05,410/- as being the duty evaded on shrimp seeds, shrimps and fish cleared after 28th September 1996 under Section 11AB of the Act. Penalty of Rs.1,13,05,410/- was imposed under Section 11AC of the Act with respect to duty evaded since 25th September 1996, and of Rs.8,00,000/- under Rule 173Q(1) of the Rules. 8. The revenue as well as the assessee questioned the correctness of the adjudication order by preferring appeals before the Tribunal. 9. The Tribunal, vide order dated 27th December 2004, allowed the assessee's appeal and dismissed the appeal filed by the revenue. Reversing the order of the Commissioner, the Tribunal observed thus: "The commissioner, after classifying the shrimp seeds under chapter 3, has worked out the amount equal to the aggregate of the Customs duty leviable as per proviso to section 3(1) of the CE Act, 1944 and demanded the same. It is on record that for clearing....
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....ribunal committed an error in relying on the decision of this Court in SIV Industries Ltd. vs. Commissioner of Central Excise and Customs [2000 (117) ELT 281 (SC)], because unlike in that case, in the present case, the assessee had sought permission of the Development Commissioner, who in turn had advised them to approach the SIA for permission to clear shrimps and shrimp seeds which, in fact, was granted and, therefore, they were required to pay duty under proviso to Section 3(1) of the Act. It was argued that under the Exim Policy, an EOU is obliged to make exports of the entire production itself and not through any other entity. 12. Per contra, Mr. Joseph Vellapally, learned senior counsel appearing for the assessee, contended that the DTA sales made by an EOU without approval of the Development Commissioner are to be assessed to Excise Duty under Section 3(1) of the Act and not under proviso to the said Section. In support of the submission, learned counsel placed reliance on the decision of this Court in SIV Industries (supra) and orders of the Tribunal in Commissioner of Central Excise, Jaipur-II vs. Pratap Singh 2003 (153) E.L.T. 711 (Tri.-Del.)], Sam Spintex Ltd. (supra)....
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....on salt manufactured in, or imported by land into, any part of India as, and at the rates, set forth in the Schedule to the Central Excise Tariff Act, 1985: Provided that the duties of excise which shall be levied and collected on any excisable goods which are produced or manufactured,- (i) in a free trade zone and brought to any other place in India; or (ii) by a hundred per cent export-oriented undertaking and allowed to be sold in India, shall be an amount equal to the aggregate of the duties of customs which would be leviable under Section 12 of the Customs Act, 1962 (52 of 1962) on like goods produced or manufactured outside India if imported into India, and where the said duties of customs are chargeable by reference to their value, the value of such excisable goods shall, notwithstanding anything contained in any other provision of this Act, be determined in accordance with the provisions of Customs Act, 1962 (52 of 1962) and the Customs Tariff Act, 1975 (51 of 1975)". 15. It is manifest that all excisable goods produced or manufactured in India are exigible to duty of Excise under Section 3 of the Act, the charging Section, at the rates set forth in the Schedule....
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....ee was leviable under main Section 3(1) of the Act. 17. It is pertinent to note that after the decision in SIV Industries' case (supra), a Circular was issued by the Central Board of Excise and Customs, New Delhi clarifying that prior to 11th May, 2001, the clearances from EOUs, if not allowed to be sold in India, shall continue to be chargeable to duty under main Section 3(1) of the Act. For the sake of ready reference Circular No. 618/9/2002-CX dated 13th February, 2002 is extracted below: "Circular:618/9/2002-CX dated 13-Feb-2002 EOU- Removal of goods by 100% EOU to DTA - Non- levy of duty under Section 3(1) of Central Excise Act, 1944 -Clarifications Circular No. 618/9/2002-CX., dated 13-2-2002 F. No. 268/69/2001-CX.8 Government of India Ministry of Finance (Department of Revenue) Central Board of Excise and Customs, New Delhi Subject: Removal of goods by 100% EOUs to DTA - Non-levy of duty under Section 3(1) of Central Excise Act, 1944. I am directed to invite reference to Supreme Court's judgment in case of SIV Industries v. CCE [2000 (117) E.L.T. 281 (S.C.) vide which the Apex Court had held that "proviso to Section 3(1) regarding the duty chargeable on goods ....