TaxTMI 
TaxTMI 
2025 (3) TMI 740
X X X X Extracts X X X X
X X X X Extracts X X X X
....t short payment of duty under provisions of Section 11A(1) of the Central Excise Act, 1944 alongwith interest as per provisions of Section 11AB of Central Excise Act 1944. (ii) I order appropriation of the amount of Rs.3,05,25,795.00 (Rupees Three crore Five lakhs Twenty five thousand Seven hundred & Ninety five only) against short payment of duty and Rs.14,38,279.00 (Rupees Fourteen lakhs Thirty eight thousand Two hundred & Seventy nine only) against payable interest already deposited towards the amount as demanded vide para above. (iii) I Impose penalty of Rs. 3,05,25,795.00 (Rupees Three crore Five lakhs Twenty five thousand Seven hundred & Ninety five only) upon M/s Chaudhry Hammer Works Ltd. ( 100% EOU), Khasra No. 34,35,36,37 & 38, Village Acheja, Post Dujana, Gautam Budh Nagar under provisions of Section 11AC of Central Excise Act, 1944 read with Rule 25 of the Central Excise Rules, 2002, and FTP. (iv) I impose penalty amounting to Rs.50,00,000/-( Rupees Fifty lacs only) on Shri Mukul Chaudhry, M.D.of M/s Chaudhry Hammer Works Ltd., ( 100% EOU), Khasra No. 34,35,36,37 & 38, Village Acheja, Post Dujana, Gautam Budh Nagar under Rule 26 of Central Exc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g permissions for the same, in contraventions of provisions of FTP; the DTA sales were made by them even beyond the limit of 50% of the FOR value of export which was not permissible at all. 2.3 Thus the appellant effected clearances of goods in DTA in contravention of the provisions of the Notification No. 23/2003-CE dated 31.3.2003 and of FTP and was not entitled for the benefit of Notification No. 23/2003-CE dated 31.3.2003 or they failed to fulfill the conditions of the Notification No. 23/2003-CE dated 31.3.2003 and thus they did not discharge duty against DTA clearances correctly. 2.4 Further investigations and enquiries were made in the matter. Statements of Appellant 2, 3 and 4 who were hold in senior management positions with the appellant were recorded. Thus it was observed that that appellant short paid the duty as detailed in table below: S No Description Amount in Rs 1 Period 2008-09 & 2009-10 2 Amount Due as per proviso to Section 3 (1) 47746677 3 Amount Paid -17220882 4 Short Paid 30525795 2.6 On being pointed out the above, the appellant deposited duty and interest as detailed below and informed the depar....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o Valves & Controls Pvt Ltd [2022 (5) TMI 1302 -Cestat Mumbai] Impugned order being non speaking is violative of principles of natural justice, reliance placed on- A K Kraipak [AIR 1970 SC 150] JAISWAL Iron Stores [2021 (9) TMI 830-Allahabad High Court] Shree Shyam Granites and marbles [2023 (2) TMI 652 -Madras High Court] Rasi Electrodes Ltd [2021 (5) TMI 671-Madras High Court] Finished goods cleared by the appellants in DTA are similar to the goods exported by them. The legislative intent behind the provision regarding DTA clearance by EOU vide Circular 85/95-Cus is to broadly maintain a 1:1 co-orelation between the export item and the DTA clearance item, without going into minute details. Reliance for interpreting the word "similar" is placed on the following decisions: Axiom Cordages Ltd. [2021 (%) TMI 665 Cestat Mumbai] DCM Hyundai Ltd. [2023 (4) TMI 211-CESTAT Chennai)] NFE at the time of clearance of finished goods was positive. Prior permission for DTA sale was not required by the Appellant. Exemption from BCD & SAD has been rightly availed by the Appellants ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... finished goods was in terms of sub-para 6.8(a) of chapter 6 of FTP. They submitted that according to said para of FTP, DTA sale of finished goods upto 50% of FOB value of Export could be done on concessional rate of duty and beyond 50% of FOB value of export, if any, on full rate of duty. They also submitted that they had achieved positive NFE which is confirmed by the Development commissioner, NSEZ vide their letter F.No.03-368/2006-100%E0U/4467 dated 11.06.10. They also enclosed certificate issued by the Chartered Accountant certificate towards quarter-wise achievement of positive NFE (Cumulatively). 6.9 They Further submitted that since. the issue was not referred to the Development Commissioner, Excise Department cannot take decision in the matter in view of the decision of case titled as "Apex Recycling Pvt.Ltd. Vs. Commissioner of Central Excise, Delhi-1" in which it was held "when LOP cancelled by Development Commissioner unit can be debonded. Cancellation of private bonded warehousing license wrong when LOP not expired. Adjudication order holding failure to achieve NFE not sustainable when issue not referred to Development Commissioner. 6.10 With regards ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ead of continuing for 10 years, they have opted out before completion of 3 years. It shows their intentions that their main purpose was to clear the goods in local market and they did not have sufficient orders for export of goods. Therefore, the NFE which is required to be calculated in a block of five years cannot be said to have been achieved when they even did not continue for 5 years as 100% EOU. In view of above, it is seen that even if it is assumed that the unit tried to calculate the NFE, before DTA clearances, the calculation of NFE as per above method was totally wrong since the unit had applied for debonding and have now. no more a status of 100% EOU unit on date. Therefore, the annual calculation of NFE based on amortization rates as per 6.9.4 would not be applicable, meaning thereby that the positive NFE assertion made by the party was faulty and incorrect and contains no validation from the Development Commissioner. Hence it was in violation of the provision of the FTP 6.14.1 I further find that there is an allegation against them that the goods cleared by them in DTA were not similar to the goods cleared for export. In this regard, with their written submis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....c use and rings of different specifications are not interchangeable. I also find that their version in this regard is also not true. As per annexures of the SCN, I find that in addition to flanges and rings, they have also cleared semi-finished products of on Alloy Steel, NPS/WNRF, Forgings as per design, shell cover of flanges, shell ring as per drawing, Lock ring as, Forged ring, Door ring as per drawing, test forging, semi finished for carbon steel, Stuffing box, packing/ gland, etc. Thus it is seen that when there is export of flanges and rings of specific design and drawing, these goods and the flanges & rings of other specifications cannot be treated as similar goods .In.this regard, the certificate of Chartered Engineer, submitted by the party is too general and is not relevant to the provisions of notfn. No. 23/2003 dated 31.03.03 5.14.2 find that for availment of benefit of the said notification relating to DTA sales, there were basic 3 conditions- (a) The goods sold in DTA should be similar to the goods which are exported; (b) The unit should have achieved positive NFE; (c) DTA sale entitlement/ permission from Development Commissioner ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... vide their letter dated 29.04.10. And thus they have deposited an amount of Rs.3,05,25,795.00 (Rupees Three crore Five lakhs Twenty five thousand seven hundred & Ninety five only) against short payment of duty and <14,38,279.00 (Rupees Fourteen lakhs Thirty eight thousand Two hundred & Seventy nine only) against interest. also find that vide their letter dated 3.5.2011, party further confirmed that they had accepted the duty liability alongwith interest amounting to Rs. 90,73,585/- + Rs. 1,39,325/- deposited by them in respect of the sales of goods in DTA over and above the eligible limit of 50% of FOB value under notfn. 23/2003 6.15.2 In this regard I find that though entire amount of duty involved in the case stands paid by the party, partly under protest and partly without protest. However, the said payment was made by the party only after the initiation of the enquiry by the Department in the matter and only when the wrong availment of the benefit of Notfn. 23/2003 was pointed out after the same came to the notice of the Department. Hence it cannot be said that the payment which has not been claimed under protest is voluntary. In fact, the stand of the party still rem....
X X X X Extracts X X X X
X X X X Extracts X X X X
....: "In exercise of the powers conferred by sub-section (1) of Section 5A of the Central Excise Act, 1944 (1 of 1944) (hereinafter referred to as the Central Excise Act), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts excisable goods of the description specified in column (3) of the Table below, and falling within the Chapter, heading No. or sub-heading No. of the First Schedule to the Central Excise Tariff Act, 1985 ( 5 of 1986 ) (hereinafter referred to as the Central Excise Tariff Act), specified in the corresponding entry in column (2) of the said Table, produced or manufactured in an Export oriented undertaking or an Electronic Hardware Technology Park (EHTP) Unit or a Software Technology Park (STP) Unit and brought to any other place in India in accordance with the provisions of Foreign Trade Policy and subject to the relevant conditions specified in the Annexure to this notification, and referred to in the corresponding entry in column (5) of the said Table, from so much of the duty of excise leviable thereon under section 3 of the Central Excise Act as specified in the corresponding entry in column (4) of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (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 payment of full duties." 4.6 It is settled preposition in law that the exemption Notification need to be interpreted strictly according to wordings of the notification. Hon'ble supreme Court has in case of Dilip Kumar & Company [2018 (361) ELT 577 (SC)] observed as follows : 52. To sum up, we answer the reference holding as under - (1) Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. (2) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the revenue. (3) The ratio in Sun Export case (supra) is not correct and all the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to the goods cleared for export is a question of fact and needs to be established by the appellant on the basis of the tangible evidences. In the present case we find that undisputedly Appellant 2, who is Managing Director of the Appellant has categorically in his statement, has admitted that the goods cleared for export and those cleared in DTA were not the "similar goods", as the goods cleared by them were tailor made goods conforming to the specific requirements of the customer. The duties due in respect of the entire clearances made in DTA was also admitted and paid by the appellant. 4.9 For the reason that the appellant has deposited the entire amount of duty along with the interest during the investigation and prior to issuance of Show Cause notice the proceedings in respect of the amounts so deposited could not have been initiated against the appellant and the same should have been closed as per law. 4.10 Appellant has raised certain issues in respect of denial of natural justice by stating that the order is non speaking order. However we do not find any merits in the said submission as the impugned order records the reason for arriving at the findings. Hon'ble Suprem....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ividual or society. 8. Aforesaid are some of the guidelines which are required to be kept in mind while writing judgments. In fact, we are only reiterating what has already been said in several judgments of this Court." As we find that the impugned order has recorded the reasons for arriving at the findings, we do not find any merits in the submissions made to the effect that the order is a non speaking one. Thus we do not find any merits in the submissions made by the appellant. 4.11 Appellant has relied upon certain decisions to submit that third time cess is not payable. The ratio of the said decisions is not disputable. However in the present case we find that appellant have themselves deposited the amount of duty and cess as calculated by them. We do not any basis for the claim so made from the impugned order. As the no separate demand has been made in respect of these demand we do not find any merits in the said submission. 4.12 Appellant would be correct in their submissions to the effect that these proceedings could have been adjudicated only after the concurrence from the Development Commissioner. However in the interest of justice and for the reason that....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the Constitution of India, would not be tenable. Having regard to the avowed objectives sought to be achieved by the impugned decision, reliance on the decision in Secretary to Govt., Tamil Nadu & Anr. (supra) is also of no avail. 42. The considerations prompting the impugned decision, in our view, outweighs the aspects highlighted on behalf of the petitioner to repudiate the same and cannot be dubbed to be antagonistic to the Act and the Policy framed thereunder. 4.14 For imposition of the penalties on the employees of the appellant 1, i.e. Appellant 2, Appellant 3 and Appellant 4, we find that impugned order records the findings as follows : 6.18 Now coming to the penalties proposed on Shri Mukul Chaudhry, Managing Director; Shri Gayatri Nath Srivastava, Vice President and Shri Manoj Singhal, Excise/Commercial Manager. I find that they were summoned for tendering of their statements. From their statements I find that they were in complete knowledge of the clearances of goods in DTA which were not similar to the exported goods. Shri Mukul Chaudhry, Managing Director of M/s Chaudhry Hammer Works Ltd., stated that the goods manufactured by the EOU are tailor ....