TaxTMI 
TaxTMI 
2018 (9) TMI 1191
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....d various goods as specified in Annexure - I to Notification No. 22/03-CE dated 31.3.2003 as amended and Notification No. 52/2003-Cus. dated 31.3.2003 as amended, without payment of central excise duties / customs duties in connection with the manufacture / production of granite articles for export as provided in para 1(a)(i) of the aforesaid notifications. They also procured / imported various goods as specified in Annexure V to the Notifications for the purpose of quarrying of granite as provided under Para 1 (d) of the Notifications without payment of central excise duties / customs duties. For procurement of the indigenous / imported goods without payment of duty, the appellant had used CT-3 Certificates and Procurement Certificates. The Joint Commissioner of Central Excise had granted necessary permission to the appellant for the purpose of taking such goods specified in Annexure V of the above notifications to the quarries from the bonded warehouse. 2.2 Notifications 22/2003-CE and 52/2003-Cus. both dated 31.3.2003 were amended vide Notifications 28/2005-CE dated 20.5.2005 and 50/2005-Cus. dated 20.5.2005 respectively. As per the amendment, a new entry 'spares upto 5% value ....
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....llow 100% EOU of quarrying granite sector to use 5% spare at quarry sites in case of breakdown and repairs required at the site. He explained that the EOU is always under supervision of officers. Since the quarries are far away the restriction is imposed, so that the goods imported duty free are not diverted. 3.4 He adverted to clause (d) of Notification No. 52/2003-Cus. dated 31.3.2003 and argued that the words used in this clause are 'all goods specified in Annexure V to this notification'. Whereas in para 7 of the said notification which deals with procedure for removal of the goods from the EOU to the granite quarries, the words are "may be allowed to take the goods as specified in Annexure V out of the bonded premises of the granite quarries". He stressed much upon the word 'as specified' and argued that it would go to show that there is no restriction for procurement of spares for use in the EOU and the restriction of 5% is only for removal of the spares from the bonded premises to the granite quarries. 3.5 The Central Government had taken into account the hardship faced by the industry as spares were required at the sites also in case of breakdown, repair etc. and ....
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....ded period is absent and the show cause notices and therefore are time-barred. 4.1 The ld. AR Shri A. Cletus supported the findings in the impugned order. He opened his arguments on the general note of explaining that when goods are imported into India, duty of customs is leviable and when the goods are manufactured central excise duty is payable. The two notifications which are under analysis in the present dispute gives customs duty benefit as well as excise duty benefit. When goods are imported by 100% EOU, as per the notification, they can avail exemption from customs duty. The unit may sometime procure goods locally and they can also purchase from other bonded warehouse. For such purchases, CT-3 certificate is issued. Before issuing CT-3 certificate, the appellant has to execute a bond. The wordings in both these notifications i.e. 22/2003-CE and 52/2003-Cus. both dated 31.3.2003 are pari materia/identical. 4.2 He argued that the emphasis given by the ld. Senior on the words used in clause (d) of Notification 52/2003-CE is out of place. Clause (d) refers to the import / procurement of capital goods for the purpose of quarrying. Clause (d) has to be read along with Annexure V....
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....6.1 The issue that arises for consideration is whether the restriction of the 5% is applicable to the spares that are removed from EOU to the quarries or whether the said restriction of 5% is in respect of the spares that are procured / imported by 100% EOU. For better appreciation, the relevant portion of the Notification is reproduced:- In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962) (hereinafter referred to as the said Customs Act), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts,- (a) all goods as specified in the Annexure-I to this notification, when imported or procured from a Public Warehouse or a Private Warehouse appointed or licensed, as the case may be, under section 57 or section 58 of the said Customs Act or from international exhibition held in India for the purposes of - xxxx xxxxxx xxxx xxxx (d) all goods specified in the Annexure V to this notification, when imported into India or procured from a Public Warehouse or a Private Warehouse appointed or licensed, as the case may be, under section57 or section 58 of the said Customs Act or from in....
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....ra 6.7(a) of HBP specifies a limit of 5% value of capita/ goods for spares to be taken to quarry site by Granite Sector EOUs. Representations nave been received stating that Revenue Authorities apply 5% limit in regard to procurement. Policy provisions are clear that 5% restriction envisaged in para 6.7(a) is only in respect of taking spares to quarry site, Spares can be procured beyond 5% limit for genuine repair work following the laid down procedure." 6.3 From this, it can be seen that representations were received stating that Revenue authorities were applying 5% limit for procurement of spares and this was causing much hardship to the granite industry. It has been clarified by DGFT, in the said letter that spares can be procured beyond 5% limit for repair works. 6.4 DGFT Policy Circular No. 10/2009-2014 dated 12.10.2009 also clarifies the very same issue. The relevant portion is reproduced as under:- "Subject: Clarification to enable procurement of spares beyond 5% by granite sector EOUs Para 6.7(a) of HBP (04-09) {para 6.6 (a) of HBP (09-14)} allows granite sector to take spares upto 5% of the value of the capital goods to quarry site. Representation s were received fro....