AI Drafter 
TaxTMI 
TaxTMI 
2020 (3) TMI 375
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...., Nagpur dated 14.2.2006 in Appeal No. SVS/91/NGPB/ 2006, the Revenue is before this Court. 2. The facts in brief giving rise to the present appeals are as under: The respondent - Universal Ferro & Allied Chemicals Ltd., Maneck Nagar, Tumsar (hereinafter referred to as "UFAC") is 100% Export Oriented Unit ("EOU" for short) approved by the Secretariat for Industrial Approvals, Department of Industrial Development in the Ministry of Industry, Government of India. UFAC was engaged in the manufacture/processing and clearance of Ferro Manganese and Silicon Manganese falling under Chapter 72 of the Schedule to the Central Excise Tariff Act, 1985. UFAC cleared these items for export as well as in Domestic Tariff Area (hereinafter referred to as "DTA") on payment of Central Excise duty. 3. The Central Intelligence Unit of the Central Excise Headquarters visited the unit of UFAC on 19.9.2001 on getting information from the Central Excise Audit party that UFAC being an EOU was indulging in the job-work activity of conversion of raw material supplied by M/s Tata Iron & Steel Company Ltd., Jamshedpur (hereinafter referred to as "TISCO"). In the view of the Revenue, the same was not al....
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....arments, agro-processing and granite sectors and by another Circular No.74/99 dated 5.11.1999 the said facility was extended to EOUs to undertake job-work on behalf of a DTA unit in aquaculture, animal husbandry, electronics hardware and software sectors. The show cause notice therefore stated, that the sector in which respondent - Assessee had carried out the job-works was not covered by either of the Circulars and, as such, the said job-works were in violation of EXIM Policy. The show cause notice called upon the respondent - Assessee to show cause, as to why the said Silicon Manganese should not be charged to full Central Excise duty as per the proviso to Section 3(1) of the Central Excise Act, 1944 (hereinafter referred to as "the Act") by denying the benefit of Notification No.8/97 dated 1.3.1997 (hereinafter referred to as "the said Exemption Notification"). 7. The show cause notice also called upon the UFAC to show cause, as to why the central excise duty amounting to Rs. 23,08,443/short paid on Silicon Manganese cleared in DTA during September 2000, should not be recovered under Section 11A of the Act. It also called upon to show cause, as to why the goods i.e. 296 MT Si....
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.... order dated 23.6.2003 confirmed the demand for Rs. 11,56,08,497/along with interest. He also imposed penalty of Rs. 50 lakhs on UFAC. He further held, that the goods i.e. 15792.85 MTs of Silicon Manganese valued at Rs. 32,31,30,000/were liable for confiscation. However, since the said goods were not available for confiscation, redemption fine of Rs. 50 lakhs in lieu of confiscation was imposed. Two more similar orders confirming demand as raised under subsequent show cause notices were also passed vide order dated 23.6.2003 and 15.3.2004. In the second order dated 23.6.2003 being Order-in-Original No.21 of 2003, personal penalty of Rs. 5 lakh was also imposed on the Chairman of UFAC, Dhunjishaw M. Naterwala. 11. Being aggrieved thereby, the UFAC as well as the Chairman of UFAC, Dhunjishaw M. Naterwala preferred appeals before the learned CESTAT. 12. The Commissioner (Appeals) had set aside the demand raised by the Revenue in respect of duty free carbon paste procured by UFAC under the CT3 certificate in terms of Notification No.1/95CE dated 4.1.1995 for use in the conversion process of Manganese ore. Being Aggrieved thereby, the Revenue filed appeal before the CESTAT being A....
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....r. (1985) 4 SCC 92; and (3) Ratan Lal Adukia vs. Union of India (1989) 3 SCC 537. He further submits, that the terms "allowed to be sold in India" and "brought to any other place in India" have been considered by this Court in the cases of Siv Industries Ltd. vs. Commissioner of Central Excise & Customs (2000) 3 SCC 367 and Sarla Performance Fibers Limited and ors. vs. Commissioner of Central Excise, Surat-II (2016) 11 SCC 635 and as such, the UFAC would be liable to pay duty as if the goods were imported into India. 16. Shri M.H. Patil, on the contrary submits, that the case of the present appellant is covered by paragraph 9.9(b) of the EXIM Policy and not by paragraph 9.17(b) of the EXIM Policy. He further submits, that all the transactions made by UFAC were made only after the valid permissions were granted by the Joint Development Commissioner, SEEPZ. Learned counsel further submits, though initially vide Circular dated 14.9.1998 (No.67/98Cus) the permission to undertake job work to EOU/EPZ from the DTA units was restricted only to units in textile, readymade garments, agro-processing and granite sectors and subsequently vide Circular dated 5.11.1999 (No.74/99Cus) it was ext....
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....of processing the same and converting it into Silicon Manganese. Undisputedly, the same is also for a valuable consideration. 21. In this respect, it will be apposite to refer to the judgment of this Court in the case of Commissioner of Central Excise, New Delhi vs. Connaught Plaza Restaurant Private Limited, New Delhi (2012) 13 SCC 639 wherein this Court observed thus: "46. We are unable to persuade ourselves to agree with the submission. It is a settled principle in excise classification that the definition of one statute having a different object, purpose and scheme cannot be applied mechanically to another statute. As aforesaid, the object of the Excise Act is to raise revenue for which various goods are differently classified in the Act. The conditions or restrictions contemplated by one statute having a different object and purpose should not be lightly and mechanically imported and applied to a fiscal statute for non-levy of excise duty, thereby causing a loss of revenue. [See Medley Pharmaceuticals Ltd. v. CCE and Customs [(2011) 2 SCC 601] (SCC p. 614, para 31) and CCE v. Shree Baidyanath Ayurved Bhavan Ltd. [(2009) 12 SCC 419] ] The provisions of PFA, dedicate....
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....b) DTA sale upto 50% of the FOB value of exports may be made subject to payment of applicable duties and fulfilment of minimum NFEP prescribed in Appendix 1 of the Policy....." 26. It will also be relevant to refer to para 9.17 (b) of the EXIM Policy, which reads thus: "(b) EOU/EPZ units may undertake job-work for export, on behalf of DTA units, with the permission of Assistant Commissioner of Customs, provided the goods are exported direct from the EOU/EPZ units. For such exports, the DTA units will be entitled for refund of duty paid on the inputs by way of Brand Rate of duty drawback." 27. It can therefore be seen, that under para 9.9(a) of the EXIM Policy, EOU is entitled to sell the rejects in the DTA on prior intimation to the Customs authorities. Such sales are to be counted against DTA sale entitlement under paragraph 9.9(b) of the EXIM Policy. The sale of rejects shall be subject to payment of duties as applicable to sale under paragraph 9.9(b) of the EXIM Policy. 28. Under paragraph 9.9(b) of the EXIM Policy, DTA sale upto 50% of the FOB value of exports is also permitted subject to payment of applicable duties and fulfilment of minimum Net Foreign Excha....
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....rtake job work on behalf of DTA units by Board's Circular 69/98Cus., dated 14th September 1998. This facility was subsequently extended to the EOU/EPZ units in aquaculture, animal husbandry, hardware, software sector vide Board's Circular No. 74/99Cus., dated 5th Nov., 1999. Now, it has been decided to extend this facility to EOU/EPZ units in all sectors. Further, it has been decided that the DTA units shall be entitled to avail of the brand rate of duty drawback for such job-work undertaken by EOUs/EPZ units concerned. Board's Circulars 67/98Cus., dated 1491998 and 74/99Cus., dated 5111999 stand modified to the above extent." (emphasis supplied) 33. In view of paragraph 10 of the Circular dated 22.5.2000, the facility of undertaking job-work by EOU/EPZ units which was restricted to specific sectors has been amended and the said facility has been extended to all sectors. It has also been provided, that DTA units shall be entitled to brand rate of duty draw back. Similarly, paragraph 11 of the Circular dated 22.5.2000 also provides, that the facility which was given to EOU/EPZ to undertake job-work on behalf of DTA units in textiles, readymade garments and granite sector....
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....eant for production either export or clearance under valid DTA permission. The unit may convert the RM into its approved product and clear the same against valid DTA sale permission (under para 9.9(b) after paying applicable duty on assessable value of finished product, i.e. value of RM + conversion charges. There is no bar on this activity under the EXIM Policy.'" (emphasis supplied) 36. It is not in dispute that all transactions between UFAC and TISCO have been entered into after the necessary permission was obtained from the Development Commissioner. As a matter of fact, the Order-in-Original itself mentions thus: "The M/s. UFAC was a 100% EOU engaged in the manufacture of Ferro Manganese & Silico Manganese and clearances thereof for export as well as in DTA on payment of Central Excise duty. The unit was also doing job work for M/s TISCO in respect of Silico Manganese on the basis of Memorandum of Agreement dated 28.12.99 entered into with M/s. TISCO. These clearances of the goods manufactured on the basis of job work had been effected on payment of duty vide Notification no.8/97Central Excise dated 1.3.97 against permission for DTA sales granted by the Dev....
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....overs any clearance to another DTA unit. Thus it is not open to the Department to interpret the Exim Policy in any other manner than what has been mentioned in Appendix 14 - IH (or 42). The word DTA sale has been loosely used in the Exim Policy and there is no definition of DTA sale in the Policy. Appendix 14IH (or 42) clarifies that it not only covers transfers through sales to DTA units but also through other means. It would be illogical to contend that the concession is available if the goods are transferred on sale to an independent unit but it would not be available when removed on stock transfer to another division / unit of the same company." 40. We will now deal with the next submission made by Shri K. Radhakrishnan, learned Senior Counsel, to the effect that under proviso to subsection (1) of Section 3 of the Central Excise Act, 1944, an EOU is liable to pay duty on the goods brought to a DTA, as if the goods were produced and manufactured outside India and were imported into India as per the provisions of the Customs Act, 1962 and that under Section 5A of the Central Excise Act, 1944, the Central Government has no power to grant exemption from payment of duty to an EOU....
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....1) of Section 3." 42. A perusal of subsection (1) of Section 3 of the Act would show, that subsection (1) of Section 3 provides for levy and collection of duty of excise in such manner as may be prescribed to be called the Central Value Added Tax (CENVAT) on all excisable goods, which are produced or manufactured in India as, and at the rates, set forth in the Fourth Schedule. However, the said subsection (1) of Section 3 excludes the applicability thereof, to the goods produced or manufactured in special economic zones. The proviso to subsection (1) of Section 3 of the Act is applicable to the excisable goods, which are produced or manufactured by a 100% exportoriented undertaking when such goods are brought to any other place in India. It provides, that in such a case, an amount equal to the aggregate of the duties of customs which would be leviable under the Customs Act, 1962 or any other law for the time being in force, on like goods produced or manufactured outside India if imported into India and where the said duties of customs are chargeable by reference to their value, the value of such excisable goods shall, notwithstanding anything contained in any other provision of ....
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....ction 319 CrPC can be exercised only during trial would be reducing the impact of the word "inquiry" by the court. It is a settled principle of law that an interpretation which leads to the conclusion that a word used by the legislature is redundant, should be avoided as the presumption is that the legislature has deliberately and consciously used the words for carrying out the purpose of the Act. The legal maxim a verbis legis non est re-cedendum which means, "from the words of law, there must be no departure" has to be kept in mind. 43. The court cannot proceed with an assumption that the legislature enacting the statute has committed a mistake and where the language of the statute is plain and unambiguous, the court cannot go behind the language of the statute so as to add or subtract a word playing the role of a political reformer or of a wise counsel to the legislature. The court has to proceed on the footing that the legislature intended what it has said and even if there is some defect in the phraseology, etc., it is for others than the court to remedy that defect. The statute requires to be interpreted without doing any violence to the language used therein. The co....
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....ods produced in FTZ or EOU. - In exercise of the powers conferred by subsection (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the finished products, rejects and waste or scrap specified in the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) and produced or manufactured, in a hundred per cent exportoriented undertaking or a free trade zone wholly from the raw materials produced or manufactured in India, and allowed to be sold in India under and in accordance with the provisions of subparagraphs (a), (b), (c), (d) and (f) of paragraph 9.9 or of paragraph 9.20 of the Export and Import Policy, 1st April, 1997 - 31st March, 2002, from so much of the duty of excise leviable thereon under section 3 of the Central Excise Act, 1944 (1 of 1944), as is in excess of an amount equal to the aggregate of the duties of excise leviable under the said Section 3 of the Central Excise Act or under any other law for the time being in force on like goods, produced or manufactured in India other than in a hundred percent export-oriented undertaking or a free trade zone....
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.... Policy. 52. Undisputedly, in the present case, the transaction between UFAC and TISCO satisfies all the three conditions. The goods are produced and manufactured by UFAC, an 100% export-oriented unit; they are manufactured wholly from the raw materials produced or manufactured in India and, thirdly, they have been allowed to be sold in India in accordance with the provisions of paragraph 9.9(b) of the EXIM Policy. 53. We will now consider the submission of Shri Radhakrishnan, learned Senior Counsel, that in view of substitution of the words "allowed to be sold in India" by "brought to any other place in India", the said Exemption Notification shall stand impliedly overruled/repealed. 54. No doubt, that the reliance placed by the learned Senior Counsel on the judgments of this Court to the effect that if there are inconsistencies in two statutes, the later would prevail is well placed. This Court in Deep Chand vs. State of Uttar Pradesh AIR 1959 SC 648 has laid down the following principles to ascertain whether there is repugnancy or not: "(1) Whether there is direct conflict between the two provisions; (2) Whether the legislature intended to lay do....