TaxTMI 
TaxTMI 
TaxTMI 
2019 (3) TMI 717
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....s are, appellant was granted an approval as a 100% Export Oriented Unit under Letter of Permission department letter dated 28.06.1993 (herein after referred to as LOP) and was originally permitted to manufacture shrimp feed, falling under Chapter sub-heading No. 2302.00 of the Central Excise Tariff Act, 1985. Under the LOP, appellant was required to export the entire production of shrimp feed maintaining value addition of minimum of 61% as per formula w.e.f 01.04.1993. Due to various circumstances beyond his control, including poor market conditions etc., appellant sought an approval of the board for broad branding for licence to include processing and export of shrimp and prawns as new articles, the said proposal by the appellant was accepted by the board and by letter dated 25.11.1997, office of the DGFT amended original LOP broad banding to include processing of shrimp & prawns. Due to this appellant was required to maintain NFEP as 57% as against 61% as stipulated in the original LOP, and he was also required to achieve export turnover of USD 63.20 million in five years beginning after commencement of commercial production or from the date of executing fresh agreement as per th....
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....on 31.03.2003 based upon provisional figures. 5. While the appellant's application for exit from EOU scheme was pending, the Revenue Authorities issued a show cause dated 18.07.2003 covering the period 01.08.1999 to 31.03.2002, demanding the central excise duty and the customs duty foregone alleging violation of conditions under Notification No. 53/97-Cus dated 03.06.1997 and the conditions of the legal undertakings/ agreements dated 15.12.1993 and 26.03.1998; insofar as domestic procurement is concerned, it was alleged that appellant had procured various raw materials as well as spares indigenously for the machinery installed for the duty free items, in terms of Notification No. 01/1995-CE for the period 01.04.1998 to 31.03.2002. The show cause notice demanded the customs duty foregone and the excise duty foregone as also interest, besides seeking to impose penalties. 6. During the pendency of the adjudication of show cause notice by the Departmental proceedings, the Development Commissioner issued the Final Exit Order from EOU scheme to appellant, on 21.08.2003 holding that export performance of the appellant for the period 01.04.2000 to 31.03.2003 has been reviewed and found t....
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....is not even the case of the Department that the goods imported/procured domestically were not used in the manufacture of articles exported or cleared for home consumption on payment of full duty. It is his submission that it is also undisputed that imported goods and domestically procured goods were used in the manufacture of articles exported or cleared for home consumption on payment of appropriate full duty. Learned Senior Counsel further submits that the Revenue Authorities do not have jurisdiction to simultaneously examine whether the export obligations was achieved or not. It was alternatively submitted that appellant had complete export obligation, as per the norms prescribed under EXIM policy, which have been accepted and confirmed under Final Exit Order dated 21.08.2003 issued by the Development Commissioner. Thus, once jurisdictional Development Commissioner held that the appellant had achieved the export obligation and the minimum positive NFEP as required under EXIM policy, there cannot be that any violation of the conditions mandatory under the above said notifications. Learned Senior Counsel submitted that in the present case, para 9.5 of the EXIM policy 1997-02 requi....
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....uthority has erred in computation of NFE and inasmuch as the Development Commissioner has expressly held same to be positive; emphasis was placed on appellants application for LOP dated 15.04.2003 which stated that NFE up to 31.03.2003 was positive up to 15.36%, submitting so, he handed over a chart showing the calculation of NFE for the period of dispute which shows the net NFE of 12%. Lastly Counsel argues that once Respondent Department has acted upon the Exit Order and de-bonded the unit, they cannot now revisit the entire issue and hold that there was suppression and misstatement of the facts. He relies upon the decision of the Apex Court in the case of CC Vs. A.S. Moolubhoy [2015 (318) ELT 576] and CCE, Vs. Kothari Products [2008 (229) ELT 12] in support of the proposition that in cases once units were de-bonded, the question of applying extended period of limitation does not arise. He would submit, similarly, in respect to excise duty demanded, final products have been cleared by paying full duty which was equivalent to the customs duty foregone and as such the question of confirmation of any duty on raw materials which were procured indigenously, does not arise. It was also....
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.... for the time being in force; according to him LUT is related with the Department of the Revenue and has huge Revenue implications for the same and therefore violation of any of the conditions therein would give jurisdiction to the Revenue to demand Customs and Excise duties. Learned Departmental Representative relies heavily on the Development Commissioner's order dated 03.05.2002, which held that appellant herein have failed to fulfill the stipulated/minimum Export Performance and achieved negative NFEP of (-) 129.38% for the first 5 year period of 01.11.1994 to 31.03.2000 and achieved negative NFEP of (-) 1.67% during the period 01.04.2000 to 08.03.2002. According to Learned Departmental Representative, Development Commissioner's order dated 03.05.2002 has attained finality and is in itself sufficient to establish that appellant had failed to fulfill the stipulated/minimum export performance; argues that Final Exit Order dated 21.08.2008 did not condone the non-fulfillment of export obligation / export performance for the earlier 5 year period and in fact reiterates the earlier Development Commissioner order dated 03.05.2002. He also argued that in any event Final Exit Order did....
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....ulating 5 years from date of revised legal agreement dated 26.03.1998 or taking the 5 years review period from 01.03.2000 (i.e. after the review period 01.11.1994 to 31.03.2000) taken by Development Commissioner in his order dated 03.05.2002 the demand could have been crystallized only subsequent to 31.03.2003 or after 31.03.2005 and not before. According to the Departmental Representative, aforesaid clearly established the show cause notice was within the period of limitation, it is further submitted that the Hon'ble CESTAT is not the appropriate forum to decide whether in the Ministry of Commerce, the Handbook of procedures prevails over EXIM policy or vice versa. 14. On careful consideration of the submissions made by both sides, we find that the entire issue is regarding whether the adjudicating authority has jurisdiction to examine as to whether appellant has fulfilled export obligation by achieving minimum positive NFE or not under Notification No. 53/97-Cus and 01/95-CE or otherwise. We find that the above issue goes to the root of the dispute, as in the impugned order the adjudicating authority has reexamined the issue whether the export obligations have been met by the ap....
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....anted necessary licence for the import of the goods for the said purpose. (3) The importer carries out the manufacture, production, packaging or job work or service in Customs bond and subject to such other conditions as may be specified by the Commissioner of Customs in this behalf. (4) Importer exports out of India 100% or such other percentage, as may be fixed by the said Board, of articles manufactured wholly or partly from the goods during the period stipulated by the said Board or such extended period as may be specified by the said Board. (5) Where it is shown to the satisfaction of the Assistant Commissioner of Customs that the said unit has been allowed by the Development Commissioner or the said Board to clear any of the said goods for being taken to any other place in India in accordance with the Export and Import Policy. (a) such clearance of capital goods, material handling equipment, office equipment and captive power plants may be allowed on payment of an amount equal to the customs duty leviable on such goods on depreciated value thereof and the rate in force on the date of payment of such duty; (b) such clearance of goods (including container, suitable for rep....
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....ing rejects, waste and scrap material) are not excisable, on payment of customs duty on imported goods used for the purpose of manufacture of such articles in an amount equal to the customs duty leviable on such articles, as if imported as such. (8) The Commissioner of Customs may permit the goods imported into India or goods partially processed or manufactured or packaged therefrom to be taken outside the hundred per cent Export Oriented Unit concerned temporarily without payment of duty for the purposes of test, repairs, refining, processing, display, job work or any other operation necessary for manufacture of final product and return to the same unit subject to such conditions and limitations as may be specified by him in this behalf. (9) The Assistant Commissioner of Customs may allow supply or transfer of goods imported by or received from, a hundred per cent Export Oriented Unit or articles manufactured by such unit to another hundred per cent Export Oriented Unit or to a unit in Free Trade Zone or Export Processing Zone for the purpose of further manufacture and export or for export or for use in the said unit, subject to such conditions and limitations as prescribed by h....
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....ge of export is subject to the conditions of the EXIM policy as notified by the Government of India under the Ministry of Commerce. Under condition No. 2 the importer has requisite licence for the import of the goods. Under condition No. 4 importer exports out of India 100% or such other percentage, as may be specified by the sad Board in the time as stipulated or as extended by the Board. Under condition No. 7 the importer may clear such goods manufactured within EOU into DTA in accordance with the provisions of the EXIM policy and subject to payment of excise duties, in the event of excise duty being nil, then the importer is required to pay customs duty on the imported goods equivalent to the customs duty payable as if the articles manufactured are imported. On holistic reading of notification in its entirety we find that the appellant is required to import and fulfill the export obligation as required under EXIM policy. As to whether the conditions required fulfillment of export obligations as per EXIM policy, the jurisdictional authority for determining such obligation has been achieved or not, is also authority under the EXIM policy. In our view, once jurisdictional Develo....
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....ated 25.11.1997 & dt. 24.02.1998 for undertaking processing of Shrimps and Prawns at the additional location at Gopalapuram, Ravulapalem Mandalam, East Godavari District, Andhra Pradesh. copies to the concerned Asst. Commissioners of Customs & Central Excise, wherein it was stipulated that final exit letter will be issued by the Development Commissioner, VSEZ subject to the compliance of the following conditions by the said unit:- a) Applicable customs and excise duties shall be paid, on the imported and indigenous capital goods, raw materials, components, consumables, spares and finished goods in stock. The unit may be allowed to dispose of raw materials, components, consumables etc., against duty free licenses. The unit also be permitted to export the CG, raw material/components etc. The unit should pay the differential duties on the advance DTA sales availed so far and remain unadjusted. b) The penalty imposed by the appropriate authority, under the Foreign Trade (Development and Regulation) Act, 1992 for non-fulfillment of the conditions of approval, would have to be paid. In case an appeal against the order-imposing penalty is pending, de-bonding would be considered if t....
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....vt. Of India, Ministry of Commerce & Industry has already declared the year 2001-02 as Blank year. The export performance of the unit for the period from 1.4.2000 to 31.03.2003 has been reviewed adding together the performance of Feed plant at Kovvur and Shrimp Processing plant at Gopalapuram being an integrated EOU covered under single Letter of Permission and also keeping in view of the year 2001-2001 being declared as Blank year as per Govt's Order and found that the unit has achieved Positive NFEP and fulfilled the Export Performance as per prescribed norms. Hence, no penal action is due to be taken against the unit under FT (D&R) Act, 1992. Now therefore the said M/s Avanti Feeds Limited covered under Letter of Permission No. 264/1993/EOB/245/93 dated 28.06.1993 as amended vide E.O 245/93 dated 25.11.1997 and 24.2.1998 is hereby allowed Final Exit from 100% EOU scheme, with immediate effect under Para 6.20 (a) of current Exim Policy. The Green Card No. 020 dated 22.12.1993 valid up to 31.10.2003 issued to M/s Avanti Feeds Limited under 100% EOU Scheme is hereby cancelled with immediate effect. (P. RAMESH KUMAR) DEVELOPMENT COMMISSIONER 18. It can be seen from the a....
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....llant had provided calculation of NFEP achieved for the period 01.04.1999 to 31.03.2002 which cumulatively which shows that positive NFEP 12.36% achieved this has not been disputed by the Revenue. 21. In any case, we find that the re-computation of the NFEP by the Adjudication Authority is without any jurisdiction, especially when the Development Commissioner has found that minimum NFEP and minimum export obligations met. Even otherwise, minimum NFEP calculated by the Adjudicating Authority after the exports at Gopalapuram Mandal have exculded. We find that the Development Commissioner in final order has considered the proceeds from both the units, the adjudicating authority could not have re-computed the same after excluding the proceeds from one of the unit, this is especially so when development commissioner expressly considered its earlier order dated 03.05.2002 while holding that appellant has achieved net positive NFEP. 22. We have to note that above finding of the Development Commissioner is within the parameters laid down in the exim policy. Under para 9.5 of the exim policy 97/02, it is mandated that the unit shall be net foreign exchange earner and minimum NFEP calculat....
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....ribed in Appendix 1 of the Exim Policy and also subject to the provisions of para 9.21 of this Handbook. If such revision is sought before completion of the approved five year period, the revised norms shall be applicable for the remaining bond period only." 24. In the present case, we find that the appellant vide a specific application dated 15.04.2003 has sought exit from EOU scheme stating that it had achieved positive NFEP and minimum export performance as stipulated under the EXIM policy as on date. In our view, Development Commissioner has examined the same and found that the appellant had achieved net positive NFEP and fulfilled the export obligations under the EXIM policy read with the handbook of procedures. Thus the findings of the Development Commissioner that appellant has achieved minimum NFEP and minimum export obligation, is in exercise of his powers under the EXIM Policy and as to be accepted by the authorities. 25. Insofar as the excise duties are concerned, we note that condition (1) (c) alleged to have been breached by appellant under notification No. 1/95-CE is similar to condition (4) of notification 53/97-Cus. We already found in the present case that juris....