2007 (8) TMI 157

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....-2001 to sell grey fabrics to M/s. Almas Textiles 2. No. KASEZ/100% EOU/11/553/99, dtd 22-3-2002 to sell grey fabrics to M/s. Anmol Traders, Swat 3. No. KASEZ/100% EOU/11/553/99/1686, dtd 20-10-2001 to sell grey fabrics to M/s. Dhawal Exports, Swat. 2. As per the conditions laid down in the above permissions, the assesses were required to pay full duties of Customs and Central Excise as applicable at the time of clearance of goods against EEFC account. However, clearances were effected against Foreign Exchange at the lower rate (6%) of Central Excise duty during the period from Feb., 2002 to June, 2002. Supplies of polyester grey fabrics in DTA were also effected by the assessees in terms of erstwhile para 9.10(b) of the Exim Polic....

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....oprietor of M/s. Anmol Traders. The notice was adjudicated by the Commissioner of Central Excise, Surat, who confirmed the demand under Sec. 3(1) of Central Excise Act, 1944 together with interest @ 24% per annum under the provisions of Sec. 11AB of the Act and imposed penalties of Rs. 50 lakhs upon the assessee under Rule 25 of Central Excise Rules, 2002 and Rs. 20 lakhs on its proprietor and Rs. 5 lakhs each on the other 3 noticees under the provisions of Rule 26 of Central Excise Rules, 2002. Appeals were filed before the Tribunal which by its Order No. M/155-159/WZB/06-III, dated 19-1-2006 - 2006 (199) E.L.T. 92 (Tribunal) referred the issues, as to whether clearances in terms of para 9.10(b) of the Exim Policy should be treated at par ....

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....n terms of para 9.9(b) of the Policy, the EOU is entitled to clear in DTA, goods worth US$ 500/-. If the EOU, clears the goods worth US$ 400/- in terms of para 9.10(b) of the Policy against foreign exchange and goods worth US$ 100/- in terms of para 9.9(b), the clearances worth US$ 400/- will not be taken into account and will not be debited in the DTA entitlement of USS 500/-. The EOU would still be entitled to clear goods worth US$ 400/- in DTA, in terms of para 9.9(b). 6. Even if Notification No. 20/98-CE is applicable to DTA clearances effected in terms of para 9.9 of the Policy, in view of the above submissions and in view of the decision of Supreme Court in Virlon Textiles - 2007 (211) E.L.T. 353, the appellants are entitled to the....

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....ent case, the clearances were effected after obtaining permission from the Development Commissioner. The clearances were effected against free foreign exchange, in terms of para 9.10(b) of the Policy. At the time of clearance, the appellants paid duty in terms of Notification No. 20/98-C.E. Notification No. 28/98-CE covered DTA clearances effected by the EOU in terms of para 9, 9(a), (b), (c), (d) or (f) of para 9.9. or para 9.20 of the Policy. According to the department, the clearances covered by Notification No. 20/98-C.E. are those affected in terms of para 9.9 and hence, clearances effected in terms of para 9.10 of the Policy are not covered. This very contention of the department has been specifically rejected by the Supreme Court in ....