2019 (2) TMI 304

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....in 2004 vide SCN dated 28.10.2004, a demand of Central Excise duty was made in respect of certain finished goods cleared by them. The allegation was that the appellant have not paid Central Excise duty properly and they have wrongly availed benefit of Notification No. 08/1997-CE. Subsequently a second SCN was issued to the appellant on 29.10.2008 seeking the demand of Customs duty on the inputs used in the finished good allegedly cleared by the appellant in the month of October 2004 and in respect of which Revenue had issued a SCN in the year 2004. Ld. Counsel argued that it has been held consistently by the Tribunal that when duty is demanded on finished good cleared by a 100% EOU then no duty can be demanded in respect of raw-material use....

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....l submission. We find that it is not disputed that the present demand on duty is in respect of raw-material used to manufacture the goods which were the subject matter of the SCN of year 2004. In 2004 demand was raised in respect of finished goods and in 2008 demand has been raised in respect of raw-materials used in the said finished goods. 5. In case of M/s Sarla Polyester Limited (Supra) the facts were similar. There was allegation on M/s Sarla Polyester Limited was that they have cleared goods clandestinely from the 100% EOU, in the instant case the goods have been allegedly removed availing notification which was not available to the appellant. Other than this difference the facts are identical. In the case of M/s Sarla Polyester Li....

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....d for the intended purpose. Even if there was clearances in excess of permissible limit it may amount to be case of diversion of finished goods, the duty shall be payable in respect of finished goods and no duty become demandable on the raw material used in the manufacture of such diverted goods." Similar are the observations in the case of M/s Sanjari Twisters (Supra), approved by the Hon'ble Apex Court as reported in 2010 (255) ELT A15 (SC). Even in the case of M/s Amitex silk Milks Pvt. Ltd (Supra) Tribunal came to similar finding, in para 3 of the said order, following has been observed: Thus, following the ratio of aforesaid decisions, we do not find any merit in the impugned order. The appeals are allowed. (Operative portion ....