TaxTMI 
TaxTMI 
2021 (7) TMI 632
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....s seeds. The respondent did not pay excise duty on the DTA Clearances of such raw oil. The Respondent clear the said raw grade oil at nil rate of duty under Serial No. 20 of Notification No. 23/2003-CE dated 31.03.2003 which exempts "Waste of Castor Oil Seed, Waste of Castor Oil Derivatives; Wastes of Sesame Seed, and Waste of Any Other Oil Seed". Show cause notices were issued to the respondents proposing demand of excise duty on the raw grade oil under Serial No. 4 of Notification No. 23/2003-CE dated 31.0.2003 on the ground that the respondent have wrongly availed benefit of Serial No. 20 of the Notification No. 23/2003-CE since raw oil cannot be considered as a mere waste even though it may be of no use to the Respondent but it is a main raw material used for manufacture of refined oil. The Learned Commissioner of Central Excise-(Ahmedabad-III) vide impugned order dated 28.11.2016 adjudicated all six show cause notices issued to the Respondent and dropped the demand both on merits and limitation following the judgment of Hon'ble Supreme Court in the Respondent's own case. Hence, the present appeal filed by the Department challenging the dropping of demand only on merits. 2. ....
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.... since the question of duty, DTA entitlement and demanding excise duty under Serial No. 4 of Notification no. 23/2003-CE dated 31.03.2003 would arise only on the goods manufactured by an EOU whereas for the purpose of raw oil, the respondents were not granted EOU permission for the same. Consequently, the said raw oil was required to be treated as manufactured by any other DTA Unit. In the DTA Unit the oil is exempted from Central Excise duty hence, the Learned Commissioner has rightly dropped the demand in the impugned order. He submits that the Learned Commissioner has rightly followed binding decision of Hon'ble Supreme Court dated 07.10.2015 in the Respondents' own case wherein the similar dispute on identical facts for Notification No. 8/97-CE, the department raised demand on the ground that raw oil cleared as waste is a by-product and excise duty equal to 30% of customs duty. The Commissioner (Appeals) in the said case set aside the demand holding that the oil was not covered under the EOU scheme and such oil was subject to nil tariff rates applicable to any other DTA units. The Revenue had filed an appeal against the said order before the Tribunal at Mumbai. The Tribunal vid....
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....08.08.2003 consider de-oiled cakes as the only product permitted for production by the respondents' EOU. Thus, raw oil is not manufactured by EOU. In the present case, Development Commissioner has approved only de-oiled cakes as the items of production. Therefore, an item in the present case raw oil which is not approved as item of production by the development Commissioner in the LOP cannot be considered an item produced by EOU. He submits that the term manufacture in context of EOU has to be given broad meaning and not the strict interpretation as provided for in the Central Excise Law. CBEC vide Circular 314/30/97- CX dated 06.05.1997 has clarified that exemption under Notification No. 1/95-CE may not be restricted to cases where manufacture under section 2(f) of the Central Excise Act 1944 is involved. It is settled position that EOU related provisions are to be interpreted in the light of EXIM Policy and not according to strict interpretation under the Central Excise Law. In this regard he placed reliance on the decision in the case of Oracle InfoTech Pvt Ltd Vs CCE reported in 2003 (152) ELT 142 (Tri.). 3.7 He further submits that the expression waste in Serial No. 20 Noti....
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....OU to the respondent Unit on the ground that export of edible oil is not encouraged. Thereafter the respondent made fresh representation vide letter dated 8 July, 1997 wherein the respondent has clarified that they do not intend to and will not export edible oil or raw oil to any country outside India. It further clarified that production of De-oiled Cake i.e. Oil cake which extracted is only sought to export out of India. Further in letter dated 28.07.1997 address to the Chief Director of Ministry of Civil supplies, New Delhi reiterates the same that De-oiled cake would be their main product and edible oil would be by-product and also stated that they are not going to export edible oil out of India as export of edible oil is banned. Thereafter letter dated 04.02.1998 was issued by Government of India, Ministry of Industry, Department of Industrial Policy and promotion whereby the respondent's unit has been permitted to be converted into 100% EOU. The said permission letter dated 04.02.1998 is scanned below:- 4.3 From the above letter in para 2(vii) a clear condition stipulated that by-product (viz-edible oils) may be sold in DTA for which no tariff concession may be available. ....
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....products Soya bean Solvent Extraction Raw Oil was not covered under 100% EOU Scheme and hence tariff rate applicable in DTA which was nil would be applicable to the by product removed by the respondent. This finding has been upheld by the Customs Excise and Service Tax Appellate Tribunal (herein after referred to as "CESTAT") as well. It has affirmed the order of the Commissioner (Appeals) and dismissed the appeal of the revenue challenging the order of the Commissioner (Appeals). After going through the order of the CESTAT, we find that all the aspect of the issue regarding classification are discussed in detail arriving at the aforesaid findings. No question of law arises for consideration. The appeal is, accordingly, dismissed." 4.5 In the above judgment of Hon'ble Supreme Court it was affirmed that by-product Soya bean Solvent Extraction Raw Oil was not covered under 100% EOU Scheme and hence tariff rate applicable in DTA which Nil would be applicable to the by-product removed by the respondent. In view of above development this particular case was earlier came before this tribunal wherein this tribunal has passed the following order: "6. Since this order w....
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....y demand as raised in the Show cause notice. However, in the impugned order the demand for the extended period i.e. beyond one year has been dropped on limitation also. On perusal of the revenue's appeal, we find that there is neither review nor grounds of appeal in respect of dropping demand for the extended period. Therefore, the said dropping of demand attained finality on limitation also. 6. As per our above discussion and finding we find no merit in the Revenue's appeal. Therefore, the impugned orders are upheld. Appeals filed by revenue are dismissed. (Order pronounced in the open court on 14.07.2021) ============= Document 1 NATIONAL INFORMATICS CENTRE Scannes with CamScanner * राषà¥à¤Ÿà¥à¤°à¥€à¤¯ सूचना-विजà¥à¤žà¤¾à¤¨ केनà¥à¤¦à¥à¤° * N/ONAL INFORMATICS CENTRE ANNEXURE-1 15 No. Rej. EOB/84(1997) Government of India By 'Regd. POSE Ministry of Industry Department of Industrial Policy and Promotion Secretariat for Industrial Assistance M/S. GUJARAT" AMBUJA EXPORTS LIMITTED AMBUJA TOWER, OPP. MEMN....
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....s admissible and Export Import Policy provisions of the Export Oriented Scheme as envisaged in 1997 - 2002, for the conversion of your existing DTA unit into a 100% EOU at of KADI THORE ROAD, KADI, MEHSANA, in the State of GUJARAT for the manufacture the following item(s) upto the capacities specified below on the basis of maximum utilisation of plant and machinery :- ITEM(S) OF MANUFACTURE x NATIONAL INFORMATICS CENTRE *) DE-OILED CAKE OF SOYABEAN/GROUND-NUT/MUSTARD/ SUNFLOWER/OTHER EDIBLE OIL SEEDS ' SOYABEAN/GROUND-NUT/MUSTARD/SUNFLOWER/OTHER EDIBLE OILS (BY PRODUCTS) : (2) The (i) * राषà¥à¤Ÿà¥à¤°à¥€à¤¯ सूचना-विजà¥à¤žà¤¾à¤¨ केनà¥à¤¦à¥à¤° UNIT ANNUAL CAPACITY MT 30950 THIRTY THOUSAND NINE HUNDRED FIFTY MT) MT 5250 ( FIVE THOUSAND HUNDRED FIFTY MT). TWO conditions stipulated in above permission is to subject the Annexure in addition to the following conditions :- The unit shall export its entire production, excluding rejects and sales ....