TaxTMI 
TaxTMI 
2013 (4) TMI 433
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....for export. In terms of the LOP dated 20-12-2000 issued to them by the Development Commissioner, Noida Export Processing Zone, they are entitled to import old and damaged electric transformers, compressors, motors, etc., which are dismantled by them and the components/parts of different metals are segregated and the scrap of different ferrous and non-ferrous metals so obtained is exported. On the basis of their export performance and in accordance with EXIM Policy, the respondent were allowed to make DTA clearances of certain quantities of metal scrap produced by them. The dispute in this case is about the rate of duty applicable on the DTA clearances of the scrap made by the respondent. According to the respondent, their activity of obtain....
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....ection 28(1) of Customs Act, 1962 read with Notification No. 53/97-Cus., and also for imposition of penalty on the Appellant under Section 112 of the Customs Act, 1962. 1.2 The show cause notice was adjudicated by the Addl. Commissioner vide order-in-original dated 19-7-2007 by which the customs duty demand as made in the show cause notice was confirmed along with interest and besides this penalty of Rs. 1 Lakh was imposed on the Respondent. 1.3 On appeal to the Commissioner (Appeals) against the Addl. Commissioner's order, the Commissioner (Appeals) vide order-in-appeal dated 21-1-2009 set aside the Addl. Commissioner's order and allowed the appeal on the ground that for the purpose of 100% EOUs, the definition of 'ma....
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.... free import of the inputs, consumables and capital goods required by 100% EOUs for use in the manufacture of or production of finished products for exports; (b) process undertaken by the respondents - dismantling old and unserviceable transformers, motors and other machines for retrieving the various metals to be sold as scrap does not amount to manufacture and as such no excise duty is chargeable at this stage so obtained and the scrap arisen in this process is not excisable; and (c) since the scrap arisen in the process undertaken by the respondent is not excisable, in terms of Condition No. 7 of the Exemption Notification No. 53/97-Cus., the duty on the inputs used in the production ....
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....o 'manufacture' under Section 2(f) of Central Excise Act, 1944. He, therefore, pleaded that there is no infirmity in the impugned order. 6. We have carefully considered the submissions made from both the sides and perused the records. The respondent are a 100% EOU engaged in re-cycling of old and used damaged electric transformers, compressors, motors, etc. which are dismantled by them and the different metals obtained are segregated. The final product of the appellant are ferrous as well as non-ferrous metals, which are exported. The respondent are allowed to clear certain quantity of their final product - scrap into DTA by the Development Commissioner in accordance with the provisions of EXIM Policy. The dispute in this case is ab....
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....anufactured in India and supplied to a 100% EOU in connection with manufacture and packaging of articles or for production or packaging of the goods for export out of India. The term ''manufacture" in this exemption notification has to be interpreted on the basis of its definition in the context of 100% EOUs as given in EXIM Policy. In other words, definition of 'manufacture' as given in the EXIM Policy is relevant only for duty free acquisition of the goods by a 100% EOUs under Notification No. 1/95-C.E. Even as per the Board's Circular No. 332/40/1997-TRU referred to in the Commissioner's (Appeals) order, a broader view of the term 'manufacture' is called for only while permitting duty free acquisition of the goods by a 100% EOUs in....
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....e equal to the duty payable on the import of the such finished products into India. The Commissioner (Appeals)'s findings that the question whether the process undertaken by the 100% EOU amounts to manufacture for the purpose of charging Central Excise duty on DTA clearances has to be decided on the basis of definition of the term 'manufacture' in EXIM Policy is not correct. The definition of term 'manufacture' in the EXIM Policy is relevant only for duty free acquisition of the inputs or capital goods by a 100% EOU under Notification No. 1/95-C.E., but for the purpose of charging Central Excise duty on the DTA clearances, and for this purposes, for deciding question as to whether the activity of 100% EOUs amounts to manufacture or not, thi....