TaxTMI 
TaxTMI 
2008 (4) TMI 670
X X X X Extracts X X X X
X X X X Extracts X X X X
....ter who was liable to pay quantum of duty equivalent to the customs duty on like goods, and that it would be fallacious to accept all the provisions governing EOU except the one relating to determination of the situs of duty liability by ignoring para 9.26 and seeking recourse to rule 7 of the Central Excise Rules, 1944. He has held that para 9.26 being specific to EOUs, it had to be resorted in cases of clearances by EOU into DTA against payment in foreign exchange on the basis of the principles "generalia specialibus non derogant". He has also relied upon the judgement of the Tribunal in Sahajanand Technologies (P) Ltd. vs. CCE, Daman 2007(210)ELT 108 wherein the Revenue's objection to the extension of the benefit of Notification 28/97-Cus., 49/2000-Cus, 44/2002-Cus and 54/2003-Cus to clearances by EOU to EPCG licence holder, on the ground that the liability of EOU for payment of Central excise duty could not be diluted by the notifications, was overruled. He has also held that the permission granted by the Development Commissioner under para 9.25 of the Handbook of Procedures was the licence, as held in Banarasi Paper & Synthetics vs. UOI 2004(170)ELT 264(Cal.) and, therefore, w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....etation which renders any contravention of law redundant or otiose, is to apply the principle of "generalia specialibus non derogant". In the case of Asian Food Industries, it has been held that the provisions of the 1962 Act, the Foreign Trade Policy and the procedures laid down thereunder provided for a composite scheme and in implementing the said provisions of the scheme, in the event of an order of prohibition, restriction or regulation is passed, the provisions of the 1962 Act mutatis mutandis would apply. Therefore, due respect has to be accorded to the composite scheme framed by the Foreign Trade (Development and Regulation) Act, the EXIM Policy and the Handbook of Procedures. The entire EOU scheme is clearly discernible from the various statutory provisions. The EOU is a creature, not of the Customs Act, but of the EXIM policy. The Policy deems clearances by EOU into DTA in terms of para 9.10(b) to be exports. Three consequences arise therefrom:- (1) Clearances into DTA, against pament in foreign exchange, would count towards export obligation - this is provided in para 10.2(b) of the EXIM policy; (2) The quantum of duty payable would be customs duty which would be payab....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to paragraphs 9.25 to 9.27 of the Handbook of Procedures, which reads "other supplies in DTA". These provisions, are, therefore, a special dispensation, covering only other supplies, i.e supplies made in terms of para 9.10 of the Exim policy. 6. In the case of Sahajanand Technologies, the grant of exemption to clearances effected by an EOU to an EPCG licence holder under an exemption issued under section 25 of the Customs Act was upheld and, therefore, the view of the learned Member(Technical) that the power to levy duty is derived by Section 3 of the Central Excise Act in respect of goods produced and manufactured in India and power of granting exemption from such duty is to be exercised under Section VA of the Central Excise Act, 1944 and no other authority under any other Act can exercise such powers, is contrary to the law laid down by the Tribunal in the above judgement. The reasoning contained in the Sahajanand Technologies order to uphold the grant of exemption on such clearances, applies with equal force for determining the situs of duty liability on such clearances although such issue was never raised or considered in that decision. The discussion of the learned Member(Te....
X X X X Extracts X X X X
X X X X Extracts X X X X
....her plenary or subordinate. If the contention of learned JCDR is accepted, it would amount to holding that para 9.26 is ultra vires the FT(D&R)Act, which cannot be a stand legitimately canvassed by the government. It is also significant to note that under para 9.26 of the Handbook of Procedures, all duties and taxes on clearances by EOU into DTA under para 9.10 of the Exim Policy were to be borne by the purchaser in DTA. The expression used is "all duties and taxes" and not merely "all taxes". The specific use of the word "duties" is quite clearly intended to inter alia cover central excise duty. If the stand of the Revenue is accepted, it would man that Central excise duty could be charged from the EOU under rule 7 of the Central Excise Rules, 1944 and also from the DTA purchaser under para 9.26 of the Handbook of Procedures. Tax cannot be collected on the same taxing event from two persons. The only way to avoid such an absurd consequence would be to allow para 9.26 full play in the sphere in which it is meant to operate viz. clearances effected under para 9.10 of the Handbook of Procedures. Even otherwise there does not appear to be any conflict with the Handbook of Procedures a....