TaxTMI 
TaxTMI 
2006 (12) TMI 296
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....d order- in-original and duty amounting to Rs. 1,44,75,596/- along with penalty of equal amount has been demanded from M/s Jakson and a penalty of Rs. 10 lakhs and Rs. 5 lakhs has been imposed on Shri Sameer Gupta, Managing Director and Shri P. Rameshan, Vice President respectively by the third order-in-original. Since the issue involved in all these are common, they are being decided by a common order. 2. The brief facts of the case are that all the three assessees in this case are 100% EOUs who were supplying goods to EPCG licence holders and accordingly, in terms of Sec.3 of the Central Excise Act, 1944, such sales were to be considered as DTA sales for which Central Excise duty was required to be paid which according to the Sec.3 of Central Excise Act, 1944 was an amount equal to the aggregate of duty of customs which would be leviable under Sec. 12 of the Customs Act, 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 Central Excise Act to determine in accordan....
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....PZ. The Assistant Collector of Customs/Central Excise in-charge of these units would function as if they are Assistant Collectors of Customs in a customs station of import and apply the same principles while extending the benefit of end use based notification. In short, where the end use based notification requires a bond to be given such end use bond can be taken from the domestic buyer treating them as if they are importers. Where the end use based notification does not prescribe such a bond, the Assistant Collector would satisfy themselves that the buyer of the goods is specific user industry for which goods are intended to be cleared for such use, i.e. buyers of the category of stock and sale merchants would not normally get the benefit except where the goods have no other end use. It was submitted that these clarifications makes it abundantly clear that benefit of end use notifications can be availed by 100% EOUs and the buyers treating them as importers and what is chargeable from the 100% EOUs as in the nature of Customs duty. 4. Attention was also invited to clarification issued by the Board vide F.No. 305/179/2004-FTT dated 1-12-04 wherein it was clarified that clari....
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.... scheme and therefore, the demand of duty and imposition of penalties are totally unwarranted. 5. The ld. DR however submits that in the present case as per Sec.3 of the Central Excise Act, what is payable by the 100% EOUs is the Central Excise duty and therefore, exemption notifications relating to customs cannot be made applicable to 100% EOUs. It was submitted that in the Board circular of 1994 import has been discussed in general manner and the word 'import' does not include import under any special scheme. In other words the circular stipulates that any party wants to source any goods from 100% EOUs in place of physical import then the duty payable is linked with normal Customs duty but no customs duty applicable in any other beneficial schemes like EPCG scheme. The notification relating to EPCG scheme i.e. notification No.55/03 has been issued under Customs Act and therefore will have no applicability in respect of Central Excise duty which only is required to be paid as per Sec.3 of Central Excise Act. Reference was invited to the Sec.5 of the Central Excise Act, 1944 which stipulates that unless specifically provided in such notification no exemption there by shall be....
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....n rightly demanded and penalties imposed. 6. We have considered the submissions. The basic issue to be determined is whether the clearances made by 100% EOUs are entitled to concessional rate of Customs duty provided under EPCG Schemes. The adjudicating authority has laid a great emphasis on the fact that what is payable under Sec.3 of the Central Excise Act by the 100% EOUs in respect of DTA clearance is the Central Excise duty and not Customs duty and therefore, the exemption notification issued under Customs Act and the exemption notification issued under Sec.5A will not be applicable in respect of clearances effected by 100% EOUs unless specifically provided for in the notification itself. We, however, find that the Commissioner has failed to observe that even though what is required to be paid is in the nature of central excise duty but through a legal fiction, clearances by 100% EOUs have been placed at par with the imports and it is for this reason that the duty required to be paid is equal to the aggregate of Customs duty payable on such like goods if produced or manufactured outside India and imported into India. Therefore, all clearances by 100% EOUs have to be trea....