2016 (1) TMI 264

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....e articles. They had permission from Development Commissioner for DTA sales. On such sales, they paid Basic Customs duty, Edu. Cess under the provisions of Section 3(1) proviso of the Central Excise Act, 1944. Under the proviso to this section, the duty payable on any excisable goods manufactured by a 100% EOU is equal to the aggregate of duties of customs leviable on like goods produced or manufactured outside India, if imported into India. Thus, the duty leviable in the present case includes CVD payable under the Customs Tariff Act apart from Basic Customs duty and cess. However, the appellant claimed exemption from payment of CVD under Notification No. 30/04 dated 9.7.2004 issued under Section 5A(1) of the Central Excise Act. The departm....

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.... Court in 2005 (186) ELT A27. 5. Heard both sides and considered the submissions. 6. The facts of the case have been brought out in the above paras. We find that the central issue is whether the proviso to Section 5A(1) will be applicable in the present case while considering application of Notifications 29/2004 and 30/2004. For sake of convenience, Section 5A(1) is reproduced below: - "(1) If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by notification in the Official Gazette exempt generally either absolutely or subject to such conditions (to be fulfilled before or after removal) as may be specified in the notification, excisable goods of any specified description from the whole or ....

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....iso to section 5A(1) is only to state that even if there is exemption from Central Excise duty under section 3(1) on any goods produced in India, it will not imply that the exemption from Central Excise duty will also be automatically available on goods produced and cleared by a 100% EOU. It is quite obvious from this proviso that, by virtue of exemption under Section 5A(1), goods produced by a 100% EOU do not get automatically exempted. This is so because the duty payable by a 100% EOU is equal to the aggregate of customs duties. In other words, even if excise duty is Nil on a product, the excise duty on a product manufactured by 100% EOU will not be Nil. Such product will still have to bear basic customs duty and cess etc on such customs ....

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....the extent it imposes liability of CVD. We find that in view of the detailed discussion and interpretation of the relevant provisions of law made by us above, the Hon'ble High Court judgment would still held good in the context of the present facts before us. Our view is also supported by the Hon'ble High Court judgment in the case of Satya Metals (supra). 6.3 Although the Commissioner (Appeals) has held that the proviso to Section 5A is not applicable, he has erred in holding that the benefit of Notification No. 30/2004 will not be available. We find that Notification No. 30/2004 is conditional. To be entitled to the concession under this notification, the assessee should not have taken credit of duty on the inputs or capital good....