TaxTMI 
TaxTMI 
2025 (8) TMI 1157
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....upees Four crore Two lakh Eleven thousand One hundred Twenty One only) under Section 11A(4) of the Central Excise Act, 1944; (iii) I order for recovery of interest from the party at the appropriate rate as applicable on the said confirmed demand of Rs. 11,12,24,588/- under Section 28AA of the Customs Act. 1962: (iv) I order for recovery of interest from the party at the appropriate rate as applicable on the said confirmed demand of Rs.4,02,11,121/- under Section 11AA of Central Excise Act, 1944; (v) I impose a penalty of Rs. 11,12,24,588/- (Rupees Eleven crore Twelve lakh Twenty four Thousand Five hundred Eighty Eight only) in terms of Section 114A of the Customs Act, 1962 (vi) I impose a penalty of Rs.4,02,11,121/- (Rupees Four crore Two lakh Eleven thousand One hundred Twenty One only) in terms of Section 11AC(1) (c) of the Central Excise Act, 1944;" 2.1 Appellant is a 100% Export Oriented Unit (100%EOU) registered as EHTP Unit and also having Central Excise Registration. They are engaged in manufacture of parts/components of mobile phone falling under tariff item 85177090 of First Schedule to the Central Excise Tariff Act, 1985. 2.2 On t....
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...."(i) Customs duty & Central Excise duty (inclusive of Education Cess and Secondary & Higher Education Cess) amounting to Rs.15,14,35,709/- (Rupees fifteen crore fourteen lakh thirty five thousand seven hundred nine only) as detailed in Annexure-A to the Show Cause Notice dated 31.08.2016. should not be demanded and recovered from them under Section 28(4) of the Customs Act, 1962 and Section 11A(4) of the Central Excise Act, 1944; (ii) Interest at the appropriate rate payable on the said amount of Customs duty and Central Excise duty not paid by them, should not be demanded and recovered from them under Section 28AA of the Customs Act, 1962 and Section 11AA of Central Excise Act, 1944; and (iii) Penalty in terms of Section 114A of the Customs Act, 1962 and Section 11AC(1) (c) of the Central Excise Act, 1944 should not be imposed on them for their acts and omissions, as discussed at para-8 of the impugned Show cause noticed dated 31.08.2016." 2.4 The said show cause notice was adjudicated as per the impugned order referred in para 1 above. 2.5 Aggrieved appellant have filed this appeal. 3.1 We have heard Shri Atul Gupta learned Counsel appearing for the app....
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....OU importing or procuring indigenously raw materials/ inputs duty free are inter alia obliged to follow the first Proviso to Para 3 of Notification No. 52/2003-Cus dated 31-03-2003, as amended vide Notification No. 87/2004-Cus dated 06.09.2004, and Proviso to Para 6 of Notification No. 22/2003 - CE dated 31-03-2003, as amended vide Notification No. 46/2004- CE dated 06-09-2004. 5.2.2 The first Proviso to Para 3 of Notification No. 52/2003-Cus dated 31-03-2003, as amended vide Notification No. 87/2004-Cus dated 06.09.2004 states that "Provided that where such finished goods (including rejects, waste, scrap, remnants and byproducts) are either non-excisable-or such finished goods (including rejects, waste scrap, remnant and by-products), if imported, are leviable to nil rate of duty of customs specified under First Schedule to the Customs Tariff Act, 1975 (51 of 197.5) and nil additional duty leviable under Section 3 of the said Customs Tariff f Act, read with exemption notification in this regard, if any, no exemption in respect of inputs utilized for the purpose of manufacture of such finished goods (including rejects, waste, scrap, remnant and byproducts,) shall be availa....
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....as in the case of non-excisable goods vide Para 6 of Notification No. 22/2003-CE, dated 31-3-2003 and Para 3 of Notification No. 52/2003-Gus.. dated 31.03.2013)." In short, the aforesaid two provisions Notification No. 52/2003-Cus dated 31-03-2003 and Notification No. 22/2003 CE dated 31-03-2003 read with Para 6.8 (1) of the Foreign Trade Policy (FTP) and para 8 of the Circular No. 54/2004-Cus dated 13.10.2004, treats the finished goods cleared in DTA, at nil rates of Basic Customs duty and CVD as a non-excisable goods and cast an obligation on the party to pay an amount equivalent to the Customs duty and Central Excise duty foregone on raw materials/ inputs utilised in the manufacture of finished goods. Accordingly, I found that the Department in light of above discussed statutory provisions, had rightly in the impugned show cause notice has demanded from the party an amount equivalent to the Customs duty and Central Excise duty foregone on raw materials/ inputs utilised in the manufacture of finished goods cleared in DTA, at nil rates of Basic Customs duty and CVD, under Sl. No.431 of Notification No. 12/2012-Cus dated 17.03.2012. 5.4 ---------- 5.5 ---....
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....e serial No. 426 is @5% on general import in India and no condition has been put on. Accordingly. there is duty on the finished goods manufactured by the Noticees and therefore the clause as define in notices vide para no.3.5 is not applicable to the Noticees regarding the reversal of duty forgone on procurement of the raw material. I found that the said submission of party is totally different from the written submission made by the party at the time of personal hearing, wherein the party has categorically stated that the parts/components of mobile phones manufactured and supplied by the party to DTA unit Le M/S Samsung India Ltd., were fully exempt from Customs duty (basic as well as CVD) vide serial No. 431 of the Notification No. 12/2012 Cus dated 17.03.2012. Το verify the party's contradictory contentions with regard to Serial No. of Notification No. 12/2012 Cus dated 17.03.2012, the application under the Customs (Import of goods at concessional rate of duty for manufacture of excisable goods) Rules, 1996, in form Annexure-III No. 075/15-16 issued by M/s Samsung India Electronics Pvt. Ltd (DTA unit) for import of goods from the party was examined and it reveale....
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....ions of the Customs Act, 1962, Central Excise Act, 1944 and the rules and regulations made there under in respect of their raw materials/ inputs procured duty free and also fulfill the condition stipulated in Customs/Central Excise Notification, as amended under which such raw materials/ inputs had been imported/sourced, as well as the Foreign Trade Policy as amended from time to time. Also the party suppressed the fact that they had used raw materials/ inputs procured duty free in the manufacture of the finished goods cleared in DTA, at nil rates of basic Customs duty and CVD and had not paid an amount equivalent to the duty forgone on such raw materials/ inputs and same came to department notice only during an enquiry initiated by officers of Antievasion. Central Excise, Noida-II." 4.3 The impugned order relies upon the decision of CESTAT in case of Green Brilliance Energy P Ltd. [2015 (324) ELT 351 (TLB)] and Pudumjee Plant Laboratories Ltd. [2016 (337) ELT 272 (T-mum)]. Both the judgment are on the interpretation of the word "non excisable goods" used in the Notification No 52/2003Cus and Notification No 22/2003-CE both dated 31.03.2003. The second decision follows the first....
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....en if the procedure of Customs Rules 1996 was not followed but practically the similar procedure was followed with reference to notification 53/2003-Cus., if any lapse on the part of the appellant it is mere procedural lapse. For this reason, the substantial benefit of notification Nos. 25/1999-Cus. and 25/2002-Cus. cannot be denied. The judgments cited by the Ld. Commissioner (A) is in the facts of the case where the goods are cleared from the Customs and received by DTA unit which are not under the control of Customs/Excise department whereas the facts of the present case is different as the appellant is a 100% EOU. Therefore the judgments cited by Revenue stand distinguished. As per the above discussion, we are of the view that the appellant is entitled for exemption under notification 25/2002-Cus. and 25/1999-Cus. Accordingly, the impugned order is set aside. Appeals are allowed." 4.11 Similar Clarification has been issued by the Director General Export Promotion vide his letter issued from F.No. DGEP/EOU/450/2006 dated 09.02.2007. The relevant text is reproduced below: "2. The matter has been examined. It is seen that parts, components and accessories of mobi....
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....n spirit, if EOUs are denied exemption on parts, components and accessories on the ground that these notifications are not applicable to EOUs, it would put EOU manufacturers at a disadvantageous position visavis DTA manufacturers. This is not the intention behind the relevant provision of EOU notification 52/2003-Cus and 22/2003-CE. Accordingly, it is hereby clarified that exemption of customs and central excise duties on parts, components and accessories of mobile handsets including cellular phones under notification no. 21/2005-Cus dated 01.03.2005, 39/2005-Cusdated 02.05.2005 and 6/2006-C.E.dated01.03.2006 shall be applicable for EOUs, if all substantive conditions of rules required to be followed under these notifications are fulfilled by an EOU to the satisfaction of the jurisdictional Asstt./ Dy. Commissioner of Customs or Central Excise, as the case may be." Revenue in their appeal have not disputed the above clarification but have stated that this circular would not be applicable for the reason that these items do not fall within the category of components, parts etc. However for the view taken by us we hold that thesaid clarification would be applicable and the be....
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....their procurement/import was specifically under Notification No.52/2003-Cus which was available only to 100% EOU. 8. We find no merits in the above contention of the Revenue. The Revenue is not disputing the fact that the import of raw material could have taken place under the cover of other two Notification No.24/2005-Cus and 12/2012-CE. The Adjudicating Authority, before extending the benefit of the said two notifications to the respondents have referred to and relied upon the various decisions of the higher courts to hold that alternative pleas raised by an assessee are required to be considered. It is well settled law that if the benefit of the notifications is otherwise available to a assessee, even though not claimed at a time of the import of the goods, the benefit cannot be denied. As such, we find no merits in the Revenue's appeal, the same is accordingly rejected." 4.13 The decisions sought to be relied upon by the revenue in their appeal are clearly distinguishable and hence we do not find any merits in the submission made relying on them." 4.5 In the case of M/s Samsung India Electronics Pvt. Ltd. Vs Commissioner of Central Excise, Noida-I Final....
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.... In addition, there are a number of customs and excise duty exemption notifications which prescribe concessional [including Nil] duty rates on specified goods [inputs/raw materials etc.] for use in manufacture of specified goods, subject to conditions prescribed. In this context, it has been stated that EOUs are not able to avail benefit of such exemptions on inputs imported or procured domestically by them. 5. The matter has been examined. As mentioned in para 2 above, non-applicability of exemptions under notifications issued under section 5A of the Central Excise Act, 1944 is only in respect of excisable goods produced or manufactured by an EOU and cleared to DTA and not in respect of inputs/raw materials procured by them domestically and utilised for production/manufacture of goods which are cleared by them to DTA. 6. In view of the above, it is hereby clarified that EOUs will also be eligible to import or procure raw materials/inputs at other concessional/Nil rate of BCD, excise duty/CVD or SAD, as the case may be, provided they fulfill all conditions for being eligible to such concessional or Nil duty. For these purposes, if an EOU is already registered with....