TaxTMI 
TaxTMI 
2018 (11) TMI 456
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....sT2, manufactured in their unit, in the DTA against payment in foreign exchange in terms of Para 9.10(b) of the EXIM Policy. The goods were removed on submission of provisional duty bond. The assessment was finalized and they were requested to pay full Central Excise duty and charges of sales tax, insurance and freight are sought to be added to the assessable value for the purpose of calculating duty denying the benefit of Exemption Notification No. 2/95-CE dated 04.01.1995. While finalizing the assessment, the adjudicating authority gave exemption from SAD in terms of 25/98 dated 12.08.1998. Aggrieved by the assessment, the appellant preferred an appeal before the first appellate authority, vide impugned order, rejected the appeal and uphe....
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....ines deemed exports and this definition clearly does not cover clearances made in terms of Para 9.10(b) of the EXIM Policy. Therefore, they cannot be considered as deemed exports or treated on par with physical exports. Exports, she emphasizes, covers only those goods where there is physical export of goods outside India. She, further draws attention to Exemption Notification No. 125/84-CE dated 26.015.1984 which was applicable during the relevant period. This exemption notification reads as follows: "Exemption to goods produced in a hundred per cent export oriented undertaking: In exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts all excisable goods produced....
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....de under this Para. She forcefully argued that as per the judgment of the Five Member Constitutional Bench of the Hon'ble Apex Court in the case of Dilip Kumar & Co. (Civil Appeal No. 3327 of 2007), any exemption notification has to be strictly construed and neither of these exemption notifications are applicable to the present case and the Tribunal cannot go beyond their scope. Therefore, the appeal may be rejected. 7. We have considered the arguments on both sides and perused the records. The facts are not in dispute; the appellant is a 100% EOU and excise duty is chargeable on products manufactured in 100% EOU in terms of proviso to Sec. 3 (1) of the Central Excise Act at the rates equal to custom duties leviable on similar products if ....
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....ure or produce from duty free imported raw materials capital goods etc., finished products/articles and as a rule every 100% EOU was obliged to export its entire production and earn foreign exchange. This was what was called as Physical Exports. However, this rule had certain exceptions. In this civil appeal, we are concerned with DTA sales. As an exception, there existed two types of DTA sales under the said Policy, namely, DTA sales against rupee and DTA sales against foreign exchange which was similar to physical exports. This latter category was known as "Other Supplies in DTA". Therefore, to put it in brief, "Other Supplies in DTA" was equated with physical exports which, as stated above, was the general rule for 100% EOU. In other wor....
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....e, however, subject to the compliance of other conditions of Notification No. 2/95-CE. Therefore, in our view, the Tribunal had erred in relying on para 9.9(b) for limiting the benefits of exemption under Notification No. 2/95-CE by imposing a new condition to the effect that the benefits would be admissible only in respect of 50% of such DTA sales against foreign exchange. Secondly, once the permission was granted by the competent authority under the Exim Policy to make DTA sales against foreign exchange, the assessee (appellant herein) was entitled to the benefit of concessional rate of duty under Notification No. 2/95-CE. If DTA sales against rupee were allowed the benefit of Notification No. 2/95-CE, then DTA supplies against foreign ex....