TaxTMI 
TaxTMI 
2024 (10) TMI 676
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....tment during the course of audit for the period 2009-2014 of the appellants financial records noticed that the appellant has obtained Letter of Permission (LoP) dated 20.04.2005 issued by Development Commissioner, Kandla Special Economic Zone (KASEZ), Gandhidham, Kutch for manufacture of finished goods as well as by-products. The by-product included Ammonium Carbonate Liquor and Ammonium Sulphate with an obligation to export entire production excluding rejects and sales in the Domestic Tariff Area as per the provisions of EOU scheme for the period of five years from the date of commencement of commercial production. The LoP as well as the green card has been extended for the further period upto 12.03.2015. The LoP as well the export period of the appellant unit has been extended by the Development Commissioner from time to time and at the relevant time it stand extended upto 12.03.2015. The department is of the view that by-product emerging during the course of manufacture namely Ammonium Carbonate Liquor and Ammonium Sulphate cleared in DTA were not similar to the goods which were exported and therefore conditions of Para 2(ii) (a) of the Notification No. 23/2003-CE dated 31.03.20....
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.... on concessional rate of duty under Notification No. 23/2003-CE. It has been the contention of the learned advocate that all the facts of availment of benefit of notification 23/2003-CE dated 31.03.2003 were available before the department and therefore, the period of limitation cannot be extended to five years and no element of fraud, mis-representation, suppression of facts with intention to evade duty are present in this case. 3.1 The learned advocate vehemently argued that Commissioner (Appeals) have erroneously denied them the benefit of concessional rate of duty under Notification No. 23/2003-CE dated 31.03.2003 as the appellant has rightfully been permitted by the competent authority by a letter of permission (LoP). The appellant was also allowed permission for Domestic Tariff Area sales with reference to the goods exported in accordance with the items permitted vide LoP. It has further been submitted that the appellant sold goods on concession rate of duty of excise in Domestic Tariff Area, after fulfilling their export obligation accordance with the items permitted by broad banded LoP within the specified value cap of 50% of the exports of the goods in accordance with t....
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....sions issue raised in the show cause notice was that the appellant cleared by-product on concessional rate of duty of excise of eligible limit, the Tribunal in the above mentioned decisions has held that Domestic Tariff Area sales were actually were allowed by the Development Commissioner as per Exim Policy. Once a LoP has allowed manufacture and export of the same as well as sale in DTA, it is wrong on the part of the department to demand full rate of excise duty denying the concessional rate of duty benefit that there is no violation of either LoP or Exim Policy. 3.5 The learned advocate also objected the imposition of penalty on Shri AK Nayak, DGM, stating that there is no evidence of Shri Nayak's involvement in willful avoidance of Central Excise duty. The appellant Shri AK Nayak was an employee of the main appellant and there was no personal gain which he could have gained by resorting to any infringement of any law with intention to evade Central Excise duty. It is vehemently argued that Adjudicating Authority as well as Commissioner (Appeals) has not applied their mind in imposing penalty under Rule 26 of Central Excise Rules, 2002. The learned advocate has relied upon th....
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....than scrap, waste or remnants are similar to the goods which are exported or expected to be exported from the units during specified period of such clearances in terms of Export and Import Policy; (b) the total value of such goods being cleared under sub- paragraphs (a), (b), (d) and (h) of Paragraph of the Export and Import policy, into Domestic Tariff Area from the unit does not excess 50% of the Free on Board value of exports made during the year (starting from 1st April of the year and ending with 31 March of next by the said unit; (c) the balance of the production of the goods which are similar to such goods under clearance into Domestic Tariff Area, is exported out of India or disposed of in Domestic Tariff Area in terms of Paragraph 6.9 of the Export and Import Policy;" It is apparent from the above mentioned provisions of exemption notification that the domestic clearance of the product manufactured by 100% EOU can be cleared at concessional rate of duty as per the provisions of Para 6.8 (a) and (g) of the Foreign Trade Policy 2009-204 which reads as follows:- "Entire production of EOU / EHTP/STP/BTP units shall be exported subject to following....
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....gn Trade Policy under Para 6.8 (a) and (g) of Foreign Trade Policy 2009-2014 as mentioned in preceding paras, provides for sale of goods of 50% of FOB value of exports subject to fulfillment of positive net foreign exchange earnings, on payment of concessional rate of duty. It further stipulates that within entitlement of DTA sale, unit may sell in DTA, its products similar to goods which are exported or expected to be exported from units. It is a matter of record that the appellants have fulfilled the export obligation and only the by-products as mentioned above have been cleared at the concessional rate of duty availing benefit of Notification No. 23/2003-CE dated 31.03.2003. 5.1 We find that provisions of Para 6.8 (g) of the Foreign Trade Policy 2009-2014 specifically covers by-products which can be cleared for the Domestic Tariff Area and reads as follows:- "(g) By-products included in LoP may also be sold in DTA subject to achievement of positive NFE, on payment of applicable duties, within the overall entitlement of sub-para 6.8(a). Sale of by-products by units not entitled to DTA sales, or beyond entitlements of sub-para 6.8 (a), shall also be permissible on paym....
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....ood Craft Products Ltd. - 1995 (77) E.L.T. 23 (S.C.) and of the Tribunal in TELCO - 2000 (126) E.L.T. 1102 (Tribunal) noted that the definitional available in the Customs Act cannot be used in respect of notifications issued under another enactment; that in such cases common parlance or dictionary meaning is to be applied. Secondly, we find from the green card dated 31-3-2006 issued by the Development Commissioner, MEPZ and subsequently also further revised by MEPZ/SEZ that the main products that was manufactured/exported to be turbo charger components. There is no doubt that the appellant had exported bearing housing whereas the goods to be cleared into DTA seeking benefit of Notification 23/2003 was turbo wheel assembly. While, the adjudicating authority has been at pains to cite the difference in characteristics and function of these two items, the fact remains that both of them are components of turbo charger and hence will surely fall under the broad banded term 'turbo charger components' which is the export product as per the EOU/green card issued to the appellant by the Development Commissioner. Hence when the permission granted to appellant has not listed any specific compo....
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....ssionerate, the same is reproduced below:- From perusal of above letter and its contents, it is clearly established that the appellant have been informing the department about the by-products which have been cleared by them availing concessional rate of duty under Notification No. 23/2003-CE dated 31.03.2003. We find that element of fraud, mis-representation, suppression of facts with intention to evade duty are not present in this case and therefore, we do not find it legally sustainable to invoke extended time proviso under Section 11A of Central Excise Act, 1944 for demanding Central Excise duty. We therefore, hold that first show cause notice is barred by period of limitation also. 7. Since, we are allowing the appeals of the main appellant on merit, we find no reason for imposition of penalty on Shri A.K.Nayak and accordingly, we set aside the penalty imposed an appellant Shri A.K.Nayak. 8. In view of above discussion, we hold that impugned orders-in-appeal are without any merits. We set-aside the same. Appeals are accordingly allowed. (Pronounced in the open court on 13.09.2024) ============= Document 1 65 Asahi Songwon September 26, 2013 To The D....
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.... KFTZ/100% EOU/11/62/2003-04/Vol-1/4577 DTD.31.07.2012 Sra Name of Finish Products A 1) Copper Phthalocyanine Blue Crude (CPC Blue Crude) 2) Beta Blue 3) Activated Crude Crude (ACC Blue Crude) B 1) Pigment Alpha Blue15/15.1 2) Annual Capacity 17000 MT. Per Annum. 5. Factory Location / Address/ Telephone No. 6. Regd. Office Address/Tel/Fax No. 7. (a) e-mail Address (Compulsory) 8. 9. (b) Web Site (Compulsory) Date of commencement of production Details of Foreign Exchange Inflow/ Outflow Pigment Violet-23 3) Polychloro Copper Phthalocyanine Green-7/36 : Block No.429-432, Vill. Dudhwada, Tal. Padra, Dist. Vadodara. Tel. No. (02662) 273657-58, : ASAHI SONGWON COLORS LTD; "Asahi House", Chhatral- Kadi Road, Indrad, Mehsana - 382 721 Tel. No. (02764) 233007 Fax No.(02764) 233020 : [email protected] : www.asahisongwon.com : 13.03.2005 (Trial Production) : Rs.13028.10 Lac :INFLOW 5000 MT. Per Annum. OUTFLOW : Rs. 3672.92 Lac (Raw Materials) 58 Rs. 13.48 Lac (Capital Goods) Rs. 56.29 Lac (Travel) Rs. 12.12 Lac (Commiss....
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....oods Including spares during year : Rs. 13.201 Lac Sub-Total [Column No. 19+ Column 26] : Rs. 4398.379 Lac 22 27. Other FE outflow (Royalty/ technological: Travel Know-how/investment/Dividend Rs. 56.29 Lac Tech. Fees : Rs. 0.00 Lac payment/Travel/Commission etc.) During the year Dividend Commission: Rs. 19.46 Lac Rs. 12.12 Lac TOTAL : Rs.87.87 Lac TOTAL OUT FLOW [Column No. 19+26+27] : Rs. 4486.249 Lac CAT (Cumulative for the current financial year) Songwon Asah Songwon Contd... 4/- Document 5 28 29. 30. Net foreign exchange earning (NFE) 89 Opening balance of indigenous capital Goods including spares during the year Purchase of indigenous capital goods During the year #4 # 31. Cumulative balance of indigenous Capital goods purchased during the year 32. Opening balance of indigenous RM/ Consumables etc. during the year 33. 34. Purchase of indigenous RM/ Consumables etc during the year Cumulative balance of indigenous RM/ Consumables purchased during the year DTA SALE Sales of goods effected in DTA if 35. (a) any 1 67.93%....
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.... export of free samples, surplus goods imported from foreign suppliers or collaborators free of cost for production operations, consignments imported for participation in exhibitions etc. Overseas investment (only for SEZ Units) Overseas investment made by the unit at the end of last quarter/year c) Less than one years Amount in $ d) More than one years Amount in $ (only for SEZ Units) c) Cases of Pending Foreign Exchange Cases of pending Foreign Exchange realisation outstanding for more than 180/360 days at the end of last quarter/financial year (180 days for EOU/EPZ units and 360 days for SEZ Units) d) External Commercial borrowing (a) Less than three years Amount in $ Amount in $ External commercial borrowing pending at the end of last quarter/year (b) More than three years Revenue contribution Revenue contribution by EOU/EPZ/SEZ units (a) Excise duty on DTA sale during the financial year 1) For FP ii) For By Products iii) For Waste Rs.25988019.00 Rs. 1335759.00 Rs. 77284.00 (b) Income tax paid, if any, during the financial year Rs.333.32 Lacs (MAT)** (c) State taxe....