TaxTMI 
TaxTMI 
2015 (11) TMI 448
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....s applicable. In addition to the earlier mentioned clearances, they are also clearing the carpets in the DTA to certain customers, who themselves are the holders of Export Promotion Capital Goods (EPCG) licence. The EPCG licence permits the holders of such licence to import specified goods at concessional rate of customs duty, which in turn is linked to export of goods/services over a period of time and subject to number of conditions in the relevant Notifications, viz., Notification No.44/2002-Cus dated 19/04/2002 and No.55/2003- Cus dated 31/03/2003. These two notifications are meant to clear the goods at concessional rate of duty on import from abroad. EPCG licence holders can also get the EPCG licence invalidated and procure the goods from a indigenous domestic unit manufacturing the goods specified in EPCG licence and domestic manufacturers can clear the same on concessional rate of duty applicable for imported goods subject to conditions specified in Notification No.44/2002-Cus & 55/2003-CE. The crux of the present case is that the appellant cleared the goods at concessional rate of duty without ensuring that their customers i.e. EPCG licence holders submit to the department ....
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....roduced within six months from the date of completion of imports. The notification also provides that the Deputy Commissioner of Customs can extend the said period of six months. 3.2 It was further submitted that condition (3) provides the importer to produce within 30 days from the expiry of each block from the date of issue of licence or evidence to the satisfaction of the Assistant Commissioner of Customs or Deputy Commissioner of Customs showing the extent of export obligation fulfilled. Here again, the Assistant/Deputy Commissioner is empowered to extend the period. 3.3 It was further submitted that since the notification itself provides for extension of time delay in producing the installation certificate/proof of fulfillment of export obligation, delay in submission of these documents is of no consequence. In support of this contention, this Tribunal judgment in the case of J.K Corporation Ltd. 1996 (88) ELT 112 (Tri) and the Hon'ble Supreme Court decision in the case of Hotline Tele tube & Components Ltd.- order dated 16.02.1998 in Civil Appeal No. 5908 of 1998 were quoted. 3.4 It was further submitted that the appeal before the Tribunal is continuation of asse....
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....tted that the bond to fulfill export obligation can be and is to be executed by the EPCG Licence holder only and not by the appellant. In support of his contention, the learned senior Counsel submitted that the CBEC vide Circular No. 305/83/94-FTT dated 15.09.1994 has clarified to same effect. In the said circular it is clarified that 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. Further in respect of clearances made to EPCG licence holders by the EOU, letter dated 21.09.2006 of Director General of Export Promotion specifically states that it is the obligation of the licence holder and not an EOU: 3.7 The Learned Senior Counsel further submitted that the presumption that the excise duty can be demanded only from manufacturer is not of universal application and is not without exception. It can be shifted to any other person by the statute, particularly with the consent/approval of the other person. In support of the said proposition, the learned Senior Counsel submitted that the Rule 196 forming Chapter X of erstwhile Central Excise Rules, 1944 prescribed similar arr....
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....n undisputed fact that the appellants have paid duty while clearing the goods in DTA at 5% being EPCG rate. The said duty rate is indeed 'appropriate duty of excise' within the meaning of said expression used in the above said Notification. It is also submitted that total of all DTA clearance i.e. normal DTA and to EPCG customer is well within the permissible limits of 50%. It was submitted that the Commissioner has conveniently mis-read Condition No.3 of the Notification No. 52/2003-Cus. It was further submitted that the opening part of para 3 is what is relevant to present case and para 6.9 (e) of the Policy is not relevant. It was further submitted that for similar reasons duty demand on the inputs procured indigenously by denying the benefit of Notification No. 1/95-CE or 22/03-CE is not sustainable. 3.10 The learned Counsel further submitted that the supply of goods to EPCG license holder amounts to deemed export in terms of Para 8.2(c) of FTP. Further, any excise duty paid by the appellant is available as refund from the DGFT vide para 8.3(c) - Hence, entire situation is revenue neutral. 3.11 It was further submitted that clearances of carpets made to EPCG Licen....
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....hich is incorrect as the SAD is exempted in terms of Serial No. 1 of Notification No. 23/2003-CE subject to the condition that goods are cleared by an EOU on payment of applicable VAT/ Sale Tax as the case may be. It was submitted that the appellants have paid the applicable VAT/Sales Tax, the question of said component does not arise at all. It was also submitted that the demand of differential excise duty covering the period from April, 2007 to February, 2008 has taken into account the CV duty rate @ 16% ad valorem, which is incorrect. During the period, the effective excise duty rate is 8% ad valorem in terms of Notification No. 29/04-CE. In fact, for the period from March, 2008 to 7.12.2008, the department has taken the excise duty @ 8% ad valorem as per Notification No. 29/04-Cus. Further, from 8.12.2008 to May, 2009, excise duty rate has been taken @ 4% ad valorem by the department. 3.16 It was also submitted that the demand of differential excise duty in the show cause notices covering the period from April, 2007 to February, 2008 has not considered exemption in terms of Serial No. 2 of Notification No. 23/2003-CE, which is otherwise available to the appellants. It was su....
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.... 11, 12 and 17 in letter and spirit. The duty was paid on removal. The appellants themselves assessed the excise duty and paid the same. Monthly Returns were filed. Invoices for clearance of the goods were issued. Hence, Rule 25(1)(a) is not attracted. Similarly, Rule 25(l)(b) deals with accounting of any excisable goods is also not attracted. Similarly, clause (c) of Rule 25 (1) is not invocable in the present case since the same is applicable only to a manufacturer conducting any activity without having any registration. This clause is also not applicable to the appellants, as they are registered with the Central Excise department. Further, Rule 25(1)(d) is not applicable as contention of department is violation of Customs Notification and not Central Excise Rules or notification. 3.19 In view of the judgment of the Hon'ble High Court of MP in the case of Universal Cable Ltd. v. UOI 1977 (1) ELT, 92, it cannot be treated as "contravention of provisions of the Central Excise Rules with an intent to evade duty" and therefore, confiscation of goods is uncalled for. Another submission made was that the Goods are not available for confiscation and therefore question of imposing....
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....submitted that the said judgment follows the Constitution Bench of the Hon'ble Supreme Court in the case of CCE v. Harichand Shri Gopal 2010 (260) ELT 3. The same judgment has been followed by this Tribunal in the case of HPCL 2014 (301) ELT 554 (T). The learned Commissioner (AR)'s main contention was that a manufacturer of excisable goods has to self assess the goods to duty on removing them from the factory. In case any condition is to be fulfilled before clearing such goods, the manufacturer making the assessment has to ensure that they are fulfilled, in case the conditions are not so fulfilled, and yet the concession/exemption is applied, the self assessment is a deliberate wrong assessment. The conditions of Rules and exemptions have to be strictly applied and followed and the words of the Notification have to be given their effect. In support of his contention, the learned AR quoted the following case laws: (a) Saraswati Sugar Mills v. CCE 2011 (270) ELT 465 (SC)(paras 7 & 8) (b) Eagle Flask Industries Ltd. 2004 (171) ELT 296 (SC) (c) Indian Aluminium Co. 1991 (55) ELT 454 (SC) (paras 3 and 5 to 8) (d) CCE v. Lloyd Insulation India 2004 (172) ELT 430 (T) ....
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....ng to fulfill export obligations - Para 2(3)- to monitor block wise EO fulfillment and if not fulfilled to demand duty and interest as prescribed - Para 2(4)-to verify installation of goods in 6 months and to consider any plea of extension of time required to install if reasons are genuine. - Para 2(5)-to ensure that DGFT does not give any block wise extension for fulfillment of EO beyond 2 years; DGFT does not regularize shortfall in EO beyond 5% and that DGFT does not extend the overall period of EO in cases where the total CIF value of licence is above Rs. 100 crores. - Para 3- to ensure that goods if re exported are identified as those exported. - Table- That the goods mentioned in the licence and which are removed/imported are those described in the Table appended. - Explanation- to ensure that the goods mentioned in the licence and which are removed/imported are as defined as Capital goods and that the Export Obligation claimed to be fulfilled is only in terms of EXPORT OBLIGATION as defined. 4.3 It was further submitted that the above mentioned conditions are mandatory conditions and until and unless the consignee is registered with the Revenue in such m....
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....nous and imported raw materials, etc. have continuing obligations to be performed once benefit of concession is availed. If such obligations are not discharged duties can be demanded without any reference to Section 11A of Central Excise Act or Section 28 of Customs Act or any Bond/Guarantee. The AR further quoted the larger bench decision of this Tribunal in the case of Bombay Hospital Trust 2005 (188) ELT 374 (T-LB), which have been upheld by the Hon'ble High Court as reported in 2006 (201) 555 (Bom). Learned AR further submitted that the appeal against the said judgment was dismissed by the Hon'ble Supreme Court 2015 (315) ELT A26. It was further submitted that the ratio of the said judgment have been upheld in the case of Fortis Hospital Ltd. 2015 (318) ELT 551 (SC). 4.5 As far as the benefit of Notification No.30/2004-Cus for computation of CVD is concerned, the learned Commissioner (AR) submitted that as per explanation to Proviso to Section 3(1) of the CEA each duty is liable to be paid at the highest of applicable rates. It is a deeming provision for goods and makes no reference to description or class of articles. The Hon'ble Supreme Court decision in the ca....
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.... goods for export out of India and hence duty demand is reasonable. The learned AR further submitted that the Condition 4(a)(ii) & (iii) of opening paragraph of Notification No.22/2003-CE and Condition 3(d)(I)(ii) &(iii) of Notification No.52/2003-Cus may be seen. It was further submitted that the provisions of para 6 of Notification No.22/2003-CE and paragraph 3 of Notification No.52/2003-Cus are not applicable because such clearances to invalidated EPCG licence holders are not covered therein and also because there is nothing which shows that such clearances of the goods were allowed to be sold in the DTA in accordance with the Foreign Trade Policy and subject to such other limitations and conditions as may be specified in this behalf..... " 4.10 It was also submitted that no permission is taken from the Development Commissioner or the AC/DC for such clearances. Further, the clearances were not made on payment of appropriate duty of Central Excise leviable under Section 3 of the Central Excise Act, 1944. If appropriate duty is not paid at the time of clearance, the conditions of the aforesaid opening paragraphs of the said Notifications mandate recovery of duty on the goods pr....
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....urther submitted that the issue involved in the ITC Ltd., case was relating to the benefit of Notification No.30/2004- CE for countervailing duty purpose and this is the same notification which is in dispute in this case. He further submitted that the ITC Ltd., case was decided by this Tribunal taking into accounts the following case laws: (i) Motiram Tolaram v. UOI 1999(112) ELT 749 (ii) Ashok Traders v. UOI 1987 (32) ELT 262 (iii) Gujarat Plastic Industries v. UOI 2003 (160) ELT 125 (iv) Priyesh Chemicals & Metals v. CCE 2000 (120) ELT 259 5.2 After noticing these decisions and also relying on the following decisions, the Supreme Court has decided the SRF case in favour of the appellant and held that Notification No. 30/04-CE and Notification No. 06/2002-CE are applicable to even imported goods. It was also submitted that in Motiram Tolaram v. UOI 1999 (112) ELT 749 (SC), the Supreme Court dealt with applicability of exemption under Notification No. 185/83-CE to imported Polyvinyl Alcohol and in view of the language employed in the said Notification, the Supreme Court in Motiram held that imported goods will not be entitled for exemption from payment of CVD, under ....
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....62 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts goods specified in the Table annexed hereto from so much of the duty of customs leviable thereon which is specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) as is in excess of the amount calculated at the rate of five percent ad valorem and from the whole of the additional duty and special additional duty leviable thereon respectively under Sections 3 and 3A of the said Customs Tariff Act. 2. The exemption contained in above paragraph, shall be 2, subject to the following conditions, namely :- (1) the goods imported are covered by a valid licence issued under the Export Promotion Capital Goods (EPCG) Scheme in terms of Chapter 5 of the Export and Import Policy permitting import of goods at the rate of five percent duty and the said licence is produced for debit by the proper officer of the customs at the time of clearance; Provided that for the import of spare parts, the validity period of the licence shall be deemed to be the period permitted for fulfilment of the export obligation in full; (2) the importer executes a b....
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.... imported, assembled or manufactured are installed in the importer's factory or premises and a certificate from the jurisdictional Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise or an independent Chartered Engineer, as the case may be, is produced confirming installation and use of capital goods in the importer's factory or premises, within six months from the date of completion of imports or within such extended period as the said Assistant Commissioner of Customs or Deputy Commissioner of Customs may allow : Provided that in the case of, - (i) manufacturer exporter and merchant exporter having supporting manufacturer(s) or vendor(s), (ii) import of irrigation equipment for use in contract farming for export of agricultural products, and (iii) importer rendering services. the capital goods may be installed at the factory or premises of such other person whose name and address are endorsed on the licence referred to in condition (i) and where the bond for full difference of duty, if necessary, in terms of condition (2), with a bank guarantee is executed by the importer and such other person binding themselves jointly and sev....
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.... and Import Policy" means the Export and Import Policy 2002-2007 published vide notification of the Government of India in the Ministry of Commerce, No. 1/2002-2007, dated the 31st March, 2002; (3) "Licensing Authority" means the Director General, Foreign Trade appointed under Section 6 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992) or an officer authorised by him to grant a licence under the said act. (4) "export obligation", - (i) in relation to importers other than those rendering services, means export, to a place outside India, of products manufactured with the use of capital goods imported, assembled or manufactured in terms of this notification : Provided that export obligation may also be fulfilled by (a) export of same product capable of being manufactured with the use of said capital goods; or (b) export of same product manufactured in different units of the licence holder; or (c) through third party exports made by an exporter or manufacturer on behalf of the licence holder by exporting the same product and in such cases, inter alia the Shipping bills shall indicate name of both the third party and the licence holder; or ....
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....led in 1st and 2nd year. Similarly, in respect of licence value of 100 crore and above, different export obligation limits are prescribed in the notification. In case the licence value is more than Rs. 100 crore, the export obligation is required to be fulfilled in a period of twelve years instead of eight years. Different percentage for block of different years is provided in the notification. (iii) The condition No.(iii) provides for monitoring of the block-wise export obligation. The importer is expected to produce the details of the export carried out in each block year within thirty days of the completion of the block year and the AC/DC is expected to examine the same and if the export obligation of a particular block is not fulfilled the importer is expected to pay customs duty of an amount equal to that proportion of duties leviable on the goods but for the exemption. Thus, if an importer who is expected to fulfil 15% of the total export obligation in 3rd and 4th year does not fulfil the same but is able to export only 10% of the total export obligation in the first four years, it is expected that importer will pay 5% of the total duty leviable on the goods but for ....
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....on clarifies that in relation to the importers rendering services, means receiving payments in freely convertible foreign currency for services rendered through the use of such capital goods. Thus, it is very important to ensure that the goods procured under the said exemption Notification are installed in the importer's premises and the export obligations are fulfilled through use of such capital goods. Thus, the importer is required to fulfil export obligation using such capital goods and not otherwise. If an importer fulfils export obligation without use of goods imported under the said exemption notification then such goods will not be entitled to the benefit of the exemption notification No.44/2002-Cus or 55/2003-Cus. It is the duty of the AC/DC to verify that the goods cleared under the said notification are installed in the importers premises and also that the export obligation is fulfilled using the goods in question. 6.4 In case of goods imported from abroad, goods are assessed at the time of clearance from the customs, assessment can be self assessment or it can be assessed by the custom officer depending upon the goods or status of importer. In both the situations....
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....obligation, instillation of the goods and other conditions of the notification. In case of any default in fulfilment of any of the condition, the Revenue would have taken action against the customers of the manufacturers who fail to fulfill any of the above post importation conditions. For example, if the carpets cleared are diverted somewhere else or the export obligation is not fulfilled by using the said carpets, it is for the concerned jurisdictional authorities to raise the demand against such defaulters. However, it is not in dispute in the present case that the appellant has not taken any care to ensure that his customers fulfill the conditions of the notification by submitting themselves to the jurisdictional authorities along with related documents, like invalidation letter, EPCG licence, bond, along with proper sureties, etc. Since the appellant has cleared the goods without ensuring the above mentioned conditions, in our considered view, the appellants are not entitled to clear the goods with, the benefit of the said notification and liability of excise duty for such clearance and consequent assessments squarely lies on the appellant. The appellant cannot be permitted to....
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....sessment of the goods would be in order. Since the appellant has cleared the goods without following any of the above procedure, the benefit of above mentioned notification cannot be extended. 6.7 We note that the constitution bench of the Hon'ble Supreme Court in the case of CCE New Delhi v. Hari Chand Shri Gopal in 2010 (260) ELT 3 (SC) has observed as under: Exemption Clause - Strict Construction 22. The law is well settled that a person who claims exemption or concession has to establish that he is entitled to that exemption or concession. A provision providing for an exemption, concession or exception, as the case may be, has to be construed strictly with certain exceptions depending upon the settings on which the provision has been placed in the Statute and the object and purpose to be achieved. If exemption is available on complying with certain conditions, the conditions have to be complied with. The mandatory requirements of those conditions must be obeyed or fulfilled exactly, though at times, some latitude can be shown, if there is a failure to comply with some requirements which are directory in nature, the non-compliance of which would not affect the essen....
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....rcumstances of each case and the purpose and object to be achieved and the context of the prerequisites which are essential to achieve the object and purpose of the rule or the regulation. Such a defence cannot be pleaded if a clear statutory prerequisite which effectuates the object and the purpose of the statute has not been met. Certainly, it means that the Court should determine whether the statute has been followed sufficiently so as to carry out the intent for which the statute was enacted and not a mirror image type of strict compliance. Substantial compliance means "actual compliance in respect to' the substance essential to every reasonable objective of the statute" and the court should determine whether the statute has been followed sufficiently so as to carry out the intent of the statute and accomplish the reasonable objectives for which it was passed. Fiscal statute generally seeks to preserve the need to comply strictly with regulatory requirements that are important, especially when a party seeks the benefits of an exemption clause that are important. Substantial compliance of an enactment is insisted, where mandatory and directory requirements are lumped togethe....
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....filing of periodical returns at the recipient unit, so as to take the shelter under the doctrine of substantial compliance for remission of duty. Respondents pointed out that they, had identical columns in the registers kept at the recipient end, hence, the requirement of maintaining separate register at the supplier end and the requirements of Chapter X was substantially complied with. It may be noted that RG-16 Register prescribed was specific to Chapter X with the sole intention of maintaining separate accounts for receipt, issue and usage of duty free remitted inputs received from the supplier unit. Similarity of columns and the details furnished therein cannot be considered as substitute for not maintaining of RG-16 Register or other registers for remission of duty under Chapter X. 27. We have already indicated that, at the supplier end, no registration under Rule 174 was obtained and, no records were kept. The applicants, at the recipient end, were also legally obliged to give various declarations in the statutory forms so as to claim exemption and such declarations admittedly were not made. Non-compliance of those conditions enumerated under various rules in Chapter X of ....
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.... procedure laid down in Chapter X of the Rules, exemption could be granted. In the case of Commissioner of Central Excise, New Delhi v. Hari Chand Shri Gopal [2010 (260) ELT 3 (SC) = (2011) 1 SCC 236] a Constitution Bench of this Court considered the decisions of this Court in Thermax Private Limited v. The Collector of Customs (Bombay),New Customs House (supra) and Collector of Central Excise, Jaipur v. J.K. Synthetics (supra) and held that a provision for exemption, concession or exception, as the case may be, has to be construed strictly and if the exemption is available only on complying certain conditions, the conditions have to be compiled with. In the aforesaid decision, the Constitution Bench further held that detailed procedures have been laid down in Chapter X of the Rules so as to curb the diversion and utilization of goods which are otherwise excisable and the plea of substantial compliance or intended use therefore has to be rejected. 6.9 In our view, both the judgements of Hon'ble Supreme Court are squarely applicable in the facts of present case. 6.10 Coming to various other contentions of the learned Senior Counsel for the appellant, the first contention o....
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....ed Counsel has quoted the judgement of this Tribunal in the case of J.K. Corporation Ltd. (supra). We have gone through the said judgement. In the said case the facts were that the appellants had cleared the goods after executing an end use bond. The appellant did not produce the end use certificate in time and the department started recovery proceedings. Thereafter the appellant produced the end use certificate and it is in these circumstances this Tribunal has taken the view that delay in filing of end use certificate can be condoned. Similarly, in the case of Hotline Teletube and Components Ltd., (supra) the appellant had cleared certain goods on execution of the end use bond. The appellant did not produce the end use certificate in time and the Revenue proceeded to recover the differential duty. The appellant thereafter produced the end use certificate and it is in these circumstances, the Hon'ble Supreme Court has taken the view. In the present case, the situation is entirely different. The appellant have not cleared the goods as per the conditions of the notification. No bond was executed. Invalidation certificate, EPCG import licence, etc. were not produced at the time o....
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....ution of such bond by appellant's customers, the appellant was not entitled to clear the goods taking the benefit of Notification No.44/2002 or 55/2003, Another contention of the learned senior Counsel was that the proposition that excise duty can be demanded only from the manufacturer alone is not without exception. We do not find that Revenue has made any such claim. Revenue's contention is that the appellant was required to assess the goods at the time of clearance and since the conditions of notification were not fulfilled, appellant was not entitled to clear the same availing the benefit of notification No.44/2002 & 55/2003 and under these circumstances, it is the appellant who is required to pay the duty. There can be no doubt if the appellant would have fulfilled the pre-clearance conditions and his customers would have failed in fulfilling post clearance conditions, the demands would have been raised from his customers and not from the appellant. 6.11 The learned Senior Counsel has submitted this Tribunal's decision in the case of Dynamic Twisters Pvt. Ltd., (supra), We have gone through the said judgement. In the said case, appellant's customers (who wer....
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....tice does not demand duty block-wise. The notification specifically provides for fulfilment of export obligation block-yearwise, such demands can be made after clearance by the appellant was in order and if such details were made available by appellant's customers and such obligation cannot be brushed aside. Argument of the learned Senior Counsel is required to be rejected. 7. The learned senior Counsel for the appellant has submitted that even if they are required to pay the duty as demanded in the show-cause notice, the countervailing duty portion is required to be computed at nil rate of duty in view of the Hon'ble Supreme Court's decision in the case of SRF Ltd. reported in 2015 (318) ELT 607 (SC). It was also submitted that , the Division Bench of the Supreme Court has already held that the decision of the Bombay High Court in the case of Ashok Traders v. UOI in 1987 (32) ELT 262 (Bom) is not a good law. In contrast the learned Commissioner (AR) submitted that three member Division Bench of the Hon'ble Supreme Court in the case of Garden Silk Mills Ltd., v. UOI 1999 (113) ELT 358 (SC) has held the same to be a good law. It was also submitted that three membe....
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....ortion of the Section 3 (1) of the Central Excise Act, 1994. The relevant portion of the said section 3 viz., proviso and clause (ii) of proviso is reproduced below: Provided that the duties of excise which shall be levied and collected in any excisable goods which are produced or manufactured. (ii) by a hundred per cent export-oriented undertaking and Drought to any other place in India, shall be an amount equal to the aggregate of the duties of customs which would be leviable under the Customs Act, 1962 (52 of 1962) or any other law for the time being in force, 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 the Customs Act, 1962 (52 of 1962) and the Customs Tariff Act, 1975(51 of 1975). Explanation 1. - Where in respect of any such like goods, any duty of customs leviable for the time being in force is leviable at different rates, then, such duty shall, for the purposes of this proviso, be deemed....
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....er is required to pay excise duty and other local taxes. In case of the imported goods since the goods are manufactured outside the country these taxes would not be leviable and every country promotes the export of the goods and taxes are generally not levied on the export of goods, the domestic manufacturer will be at a disadvantages position as far as local taxes such as excise duty, sales tax, octroi, etc. are concerned. The object of Section 3 of the Customs Tariff Act, 1975 is to bring a level playing field. The said section primarily provides levy of additional duty equal to excise duty, sales tax, local taxes and other charges. This section reads as: 3.(1) Levy of additional duty equal to excise duty, sales tax, local taxes and other charges. - Any article which is imported into India shall, in addition, be liable to a duty (hereafter in this section referred to as the additional duty) equal to the excise duty for the time being leviable on a like article if produced or manufactured in India and if such excise duty on a like article is leviable at any percentage of its value, the additional duty to which the imported article shall be so liable shall be calculated at that ....
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....nvenience or limitation in collecting the excise duty. Collecting tax from large number small scale units creates lot of administrative work for tax administration and also uncalled tax compliance burden on small scale units. Moreover, value addition may not be substantial. For example, the plastic granules which are obtained from petroleum oil are normally manufactured by large size units. However, plastic granules are used by thousands of small industries for manufacture of household plastic goods or packaging material, etc, There may be few big units also manufacturing household plastic goods or packaging material. In such situation, government may decide to exempt such household plastic goods or packaging goods subject to the condition that no credit of inputs is availed. Manufacturers of such down stream products will have an option either to take Cenvat Credit and pay the duty on the goods manufactured by them or not to take Cenvat credit on plastic granules, dyes, colour, etc. and also not to pay the duty on the goods manufactured. As mentioned earlier, generally these options are given in order to make thousands of small units free from maintaining records and follow excise....
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....s covered by Notification No.30/2004-CE. 8.3 The carpets are also chargeable to two rates of duty vide Notification No.29/2004-CE and 30/2004-CE. The appellant is a 100% EOU and as per proviso to Section 5A(1) of the Central Excise Act, the above mentioned exemption notifications are not applicable to 100% EOUs. However, for the purpose of computing countervailing duty when the goods are being cleared from the DTA, the benefit of such notification is extended. However, since the appellant is 100% EOU, in our view as per Explanation 1 after clause (ii) of proviso to Section 3 (1) of the Central Excise Act, since there are two rates, viz., 8% and NIL rate highest of the two i.e., 8% will be chargeable. In the case of 100% EOU due to their status as 100% EOU, they are eligible to import or procure locally yarns, colours and other chemicals without payment of duty while DTA units will be required to purchase duty paid inputs. The main benefit of second option is that manufacturer need not follow excise procedures and records and can be out of excise control while in first option if a manufacturer is exporting the goods, he will get refund of duty. Thus, in case of 100% EOU when the ....
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....goods. 6. In the present case, admitted position is that no such Cenvat credit is availed by the appellant However,the reason for denying the benefit of the aforesaid Notification is that in the case of the appellant, no such credit is admissible under the Cenvat Rules. On this basis, the CEGAT has come to the conclusion that when the credit under the Cenvat Rules is not admissible to the appellant, question of fulfilling the aforesaid condition does not arise. In holding so, it followed the judgment of the Bombay High Court in the case of 'Ashok Traders v. Union of India'[1987 (32) E.L.T. 262], wherein the Bombay High Court had held that "it is impossible to imagine a case where in respect of raw nephtha used in HOPE in the foreign country, Central Excise duty leviable under the Indian Law can be levied or paid." Thus, the CEGAT found that only those conditions could be satisfied which were possible of satisfaction and the condition which was not possible of satisfaction had to be treated as not satisfied. 7. We are of the opinion that the aforesaid reasoning is no longer good law after the judgment of this Court in 'Thermax Private Limited v. Collector of Custom....
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....uantification of additional duty in such a case, it has to be imagined that the article imported had been manufactured or produced in India and then to see what amount of Excise duty was leviable thereon." 8.7 We note that the issue before the hon'ble Supreme Court was not that there are two rates of duties and higher of the two rates are required to be taken as envisaged in Explanation to Section 3 (1) of the Customs Tariff Act:. But the issue was whether the benefit of Notification No.6/2002 will be available or not. We also note that in the case of SRF Ltd. (or ITC Ltd.) units were not 100% EOU and it was not a case of clearance of goods to DTA and determination of duty under clause (ii) of proviso to Section 3 (1) of the Central Excise Act reed with Section 3 (1) of the Customs Tariff Act and the two explanations under these sections. Thus, the implication of explanation given in: the Central Excise Act relating to clearance from 100% EOU as also Explanation under Section 3 (1) of the Customs Tariff Act were not the issue before the hon'ble Supreme Court. The issue was limited whether benefit of Notification No.6/2002 can be extended in case of imported goods. The ho....
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....;s debt, and, on this argument being heard, the Court granted the order. No consideration was given to the question whether a garnishee order could properly be made on an account standing in the name of the liquidator. When, therefore, this very point was argued in a subsequent case before the Court of Appeal in Lancaster Motor Co. (London) Ltd. v. Bremith. Ltd.. [1941] 1 KB 675. the Court held itself not bound by its previous decision. Sir Wilfrid Greene, M.R., said that he could not help thinking that the point now raised had been deliberately passed sub-silentio by counsel in order that the point of substance might be decided. We went on to say that the point had to be decided by the earlier court before it could make the order which it did; nevertheless, since it was decided "without argument, without reference to the crucial words of the rule, and without any citation of authority", it was not binding and would not be followed. Precedents sub-silentio and without argument are of no moment This rule has ever since been followed. One of the chief reasons for the doctrine of precedent is that a matter that has once been fully argued and decided should not be allowed to be reopene....
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....act that the hon'ble Supreme Court's judgment of sub-silentio, in our view, the judgment of the hon'ble Supreme Court does not help the cause of the appellant and a plain reading of the Explanation 1 to clause (ii) of proviso to Section 3(1) of the Central Excise Act, as also Explanation to Section 3(1) of the Customs Tariff Act make it absolutely clear that when two rates of duties are applicable then the highest of the two would be applicable. Any other interpretation will defeat the object and purpose of these parts of the legislations. It will provide imported goods advantageous position vis-a-vis similar goods manufactured by domestic area unit. Similarly, 100% EOU will be in far advantageous position vis-a-vis DTA units while clearing the goods in DTA. In fact, such units will have double advantage. The situation would be that 100% EOU, (which are eligible to get duty free inputs) will get inputs duty free and since they have got the inputs duty free there is no question of availing the credit and at the time of clearance of the manufactured goods they will not be required to pay countervailing duty component. On the other hand, DTA units will be required to pay t....
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....levant in the present dispute viz. Notification Nos. 29/2004-C.E. and 30/2004-C.E. While appellant is claiming the goods to be covered by Notification No. 30/2004-C.E., Revenue is claiming that applicable Notification is 29/2004. There is no dispute that excisable goods cleared by the appellant are covered by both the notifications. However, rates and conditions are different in two notifications. Notification No. 29/2004-C.E. prescribed duty of 4% (on cotton yarn) and 8% (on other yarns covered by specific headings) without any condition. Notification No. 30/2004-C.E., on the other hand prescribes NIL rate of duty subject to the condition that no credit of duty on inputs or capital goods has been taken under the provisions of the Cenvat Credit Rules, 2004. This condition cannot be satisfied on the goods manufactured or produced outside India and imported into India as the Central Excise Law including Cenvat Credit Rules, 2004 are inapplicable there. Thus we hold that duty rates applicable will be as per Notification No. 29/2004 C.E. or any other notification (if relevant to the goods in question) and not as per Notification No. 30/2004-C.E. Further, Explanation to Section 3(1) of ....
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.... Notification No.2/95-CE and Notification No.23/03-CE on the ground elaborated in Para 31 and 32 of the impugned order. The Commissioner has observed that the noticee neither submitted any evidence to the extent of satisfying of conditions mentioned in the Notifications, i.e, achieving positive NFE and clearance being 50% of the FOB value of the export during the year. The learned Senior Counsel for the appellant submitted that barring one show-cause notice dated 04/08/2008 covering period April 2007 to February 2008 in all other show-cause notices, the benefit of notification No.2/95-CE or 23/2003-CE has already been extended and even in respect of this show cause notice, for the period covered by the said notice they are satisfying all the conditions of the notification as they have achieved NFE and clearance in the DTA (including the clearances under EPCG licence) is far less than 50% of the FOB value of the export. In support of the same, the senior Counsel has also submitted data in the tabular form indicating DTA sales permission given by Development Commissioner, DTA clearances by availing Sl.No.2 of Notification NO.23/2003-CE, DTA sales entitlement remaining and value of cl....
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....t find any substance for denying the benefit of said notifications and demanding duty on the inputs. We accordingly set aside the demands of Customs duty amounting to Rs. 2,83,88,952/- along with interest, etc. and also Central Excise duty amounting to Rs. 9,83,474/- along with interest. Penalties corresponding to these demands are also set aside. 11. We find that extended period of limitations have been invoked in one of the show-cause notices. In the show-cause notice reference to B-17 bond along with proviso to Section 11A is also mentioned. We find that Commissioner in her adjudication order has spoken about the B-17 bond alone. In the order portion, the demand has been confirmed in terms of B-17 bond along with provisions of Section 11A. The learned Commissioner (AR) submitted the judgment of this Tribunal in the case of Endress + Hauser Flowtec (I) Pvt. Ltd. v. CCE, Aurangabad 2009 (37) ELT 598 (Tri-Mumbai) in support of the contention that B-17 bond is good enough and on the other hand the learned Senior Counsel has submitted that the decision of this Tribunal in the case of CCE v. Emcure Pharmaceuticals Ltd. 2014 (307) ELT 180 (Tri-Mum). The learned Commissioner (AR) has....