TaxTMI 
TaxTMI 
2025 (10) TMI 1074
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....een filed by Revenue assailing the Order-in-Original No. GOA-EXCUS-000-COM-009-14-15 dated 30.01.2015, on the grounds that the demand of duty was not confirmed in terms of Section 11A(5)/11A(4) of the Central Excise Act, 1944 as proposed in the Show Cause Notice stating the specific grounds for invoking extended period and that the learned Commissioner had not imposed penalty on the appellants under Section 11AC ibid. 2.1 On going through the averments made in all these appeals, we are of the view that the appeals preferred by the appellants assessee and the Revenue is arising from common issues dealt with in both the orders-inoriginal / impugned orders covering the demand of duty, interest and penalty for the period 2008-2012 (March, 2008 to December, 2012) issued vide Show Cause Notices (SCNs) dated 21.11.2012 and 11.01.2013 adjudicated vide the impugned order dated 30.01.2015 and for the period 01.01.2012 to 30.09.2015 (January, 2012 to September, 2015) issued vide revised SCN dated 26.05.2016 adjudicated by the impugned order dated 04.11.2016. Thus, we are of the view that these appeals can be considered together for hearing in the interest of justice. Therefore, with the co....
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....g of 50% of FOB value of exports and subject to fulfilment of positive NFE, payment of concessional Central Excise duty as specified vide Notification No.23/2003-C.E. dated 31.03.2003. Further, EOU unit manufacturing and exporting more than one product can sell those products into DTA, up to 75%/90% of FOB value of export of specific products, subject to the aforesaid overall ceiling limit of 50% of FOB value of total exports. However, as the components/parts manufactured by the appellants are not similar goods, they have contravened the FTP in clearance of such goods to the DTA by availing the concessional rate of Excise duty under Notification No. 12/2012-C.E. dated 17.03.2012 (Sr. No. 239/240) to which they are not eligible and therefore, the Department had demanded the differential duty involved in such DTA clearances by invoking extended period of limitation, besides imposition of penalty on the appellants. Various SCNs issued in this regard were adjudicated by the learned Commissioner vide the impugned orders dated 30.01.2015 and dated 04.11.2016. Being aggrieved with the impugned orders, the appellants assessee have filed these appeals before the Tribunal. Revenue has also f....
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....ounds alleging any suppression, misrepresentation of facts etc. for demand of differential duty invoking extended period of time. On the above basis, he submitted that the demands confirmed in the impugned orders be set aside. 3.4 Learned Advocate stated that in respect of clearance of goods made by appellants to DTA, they had complied with all the laws and regulations laid down under Customs statute as well as FTP. In support of their stand, they relied upon the following decisions: (i) Steel Equipment Private Ltd. Vs. Collector of Central Excise - 1988 (34) E.L.T. 8 (S.C.) (ii) Abi Turnamatics Vs. Commissioner of GST & Central Excise - 2019 (366) E.L.T. 1048 (Tri. - Chennai) (iii) Abi Showatech India Ltd. Vs. Commissioner of GST & Central Excise - 2019 (2) TMI 1186 - CESTAT Chennai (iv) Axiom Cordages Limited Vs. Commissioner of Central Excise, Thane-II - 2021 (5) TMI 665 - CESTAT Mumbai affirmed by the Hon'ble Supreme Court 4. Learned Authorized Representative (AR) appearing for Revenue, reiterated the findings made by the Commissioner in the impugned orders. He further stated that since the appellants had not correctly mentioned the man....
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....ndertaking and brought to any other place in India, shall be 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 at chargeable by reference to their value; the value of such excisable goods shall, notwithstanding anything contained in any other provision of this Act, we determined in accordance with the provisions of the Customs Act, 1962 and the Customs Tariff Act, 1975 (51 of 1975)......." Foreign Trade Policy 2009 - 2014 "CHAPTER-6 EXPORT ORIENTED UNITS (EOUs), ELECTRONICS HARDWARE TECHNOLOGY PARKS (EHTPs), SOFTWARE TECHNOLOGY PARKS (STPs) AND BIO-TECHNOLOGY PARKS (BTPs). Eligibility 6.1 Units undertaking to export their entire production of goods and services (except permissible sales in DTA), may be set up under the Export Oriented Unit (EOU) Scheme, Electronics Hardware Technology Park (EHTP) Scheme, Software Technology Park (STP) Scheme or Bio-Technology Park (BTP) Scheme for manufacture of goods, including repair, r....
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....eyor belts or belting, of plastics of Chapter 39, or of vulcanised rubber (heading 4010), or other articles of a kind used in machinery or mechanical or electrical appliances or for other technical uses, of vulcanised rubber other than hard rubber (heading 4016);... 2. Subject to Note 1 to this Section, Note 1 to Chapter 84 and to Note 1 to Chapter 85, parts of machines (not being parts of the articles of heading 8484, 8544, 8545, 8546 or 8547) are to be classified according to the following rules : (a) parts which are goods included in any of the headings of Chapter 84 or 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8487, 8503, 8522, 8529, 8538 and 8548) are in all cases to be classified in their respective headings; (b) other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a machine of heading 8479 or 8543) are to be classified with the machines of that kind or in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate. However, parts which are equally suitable for use principally with the goods of headings 8517 and 8525 to 8528....
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....1 19 60 --- Screw conveyor centrifuges --- Other : 8421 19 91 ---- For chemical industries 8421 19 99 ---- Other - Filtering or purifying machinery and apparatus for liquids: 8421 21 -- For filtering or purifying water : 8421 21 10 --- Ion exchanger plant or apparatus 8421 21 20 --- Household type filters 8421 21 90 --- Other 8421 22 00 -- For filtering or purifying beverages other than water 8421 23 00 -- Oil or petrol-filters for internal combustion engines 8421 29 00 -- Other - Filtering or purifying machinery and apparatus for gases: 8421 31 00 -- Intake air filters for internal combustion engines 8421 39 -- Other: 8421 39 10 --- Air separators to be employed in the processing, smelting or refining of minerals, ores or metals; air strippers 8421 39 20 --- Air purifiers or cleaners 8421 39 90 --- Other - Parts: 8421 91 00 -- Of centrifuges, including centrifugal dryers 8421 99 00 -- Other" 8.1 On plain reading of the above legal provisions under the Central Excise Act, 1944, it transpires t....
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.... under its scope: (i) goods covered under sub-heading 8421 10/tariff items from 8421 1100 to 8421 1999 relates to various types of 'centrifuges', which is not relevant for the products under dispute; (ii) goods covered under sub-heading 8421 20/tariff items from 8421 2110 to 8421 2900 relates to various types of 'filtering or purifying machinery and apparatus for liquids'. Further, industrial type and house hold type filtering or purifying machinery for water is specifically covered under tariff items 8421 2110, 8421 2190 and 8421 2120, respectively. (iii) All types of 'filtering or purifying machinery and apparatus for gases' are covered under sub-heading 8421 30/tariff items from 8421 3110 to 8421 3990; (iv) parts of 'centrifuges' are covered under the scope of tariff item 8421 9100 and parts of other machinery and apparatus are covered under tariff item 8421 9900. 8.3 From the facts on record it clearly transpires that the classification of items under dispute are code line vessels/ code line vessels with membrane, filter valve assembly, FRO vessel tanks, HRO membrane, pool/water filter, RO system, UV system, water softener system, water fi....
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....e of the excisable goods in DTA shall be in accordance with the paragraph 6.8(a) of FTP policy. Further, in terms of notification No.12/2012-C.E. dated 17.03.2012, 'water filtration or purification equipment' classified under sub-heading 8421 21 are extended with concessional excise duty, whereas the 'parts' classifiable under tariff item 8421 9900 are not provided with any such exemption. Since, we have held the classification of goods under tariff item CTI 8421 2190, such concessional rate of excise duty is rightly eligible for the appellants. 8.6 On plain reading of the Paragraph 6.8 (a) of FTP (2019-14) it provides that "Units other than gems and jewellery units may sell goods up to 50% of FOB value of exports, subject to the fulfilment of positive NFE on payment of concessional duties. Within entitlement of DTA sale, units may sell in DTA, its products similar to goods which are exported or expected to be exported from units. However, units which are manufacturing and exporting more than one product can sell any of these products into DTA, up to 90% of FOB of export of the specific products, subject to the condition that total DTA sale does not exceed the overall entitlemen....
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....in the decision after referring to the judgment of the Hon'ble Supreme Court in Wood 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." 8.8 In the case of Axiom Cordages Ltd. (supra), the Co-ordinate Bench of the Tribunal vide Final Order No. A/86338-86340/2021 dated 19.05.2021 had elaborately dealt with various case laws on the issues under dispute in a similar case and had extended the benefit of similar goods and exemption applicable to EOUs in respect of DTA clearances. The relevant paragraphs of the said order is given below: "15. We find that coordinate benches of the Tribunal in a series of decisions held that the appellants contention is correct and that in terms of the Para 6.8 of FTP, in respect of the units which are manufacturing more than one item, goods whose exports are less can be cleared more in the DTA subject to the overall limitation of 50% of the FOB of export performance. Chennai Be....
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.... card dated 31.03.2006 issued by the Development Commissioner MEPZ and subsequently also further revised by the 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 no. 23/2003 was turbo wheel assembly. While the adjudicating authority has been at pains to cite the difference in characteristic and function of these two items, the fact remains that both of them are components of turbo charger and hence would surely fall under the broad banded term "turbo charger components' which is the export product as per the EOU / green card issued to be appellant by the Development Commissioner. Hence, when the permission granted to the appellant has not listed any specific components of a turbo charger but instead has only indicated as export product of 12,50,000 nos. of turbo charger component which was even subsequently enhanced to 32,00,000 nos. of turbo charger components, the appellant cannot then be said to have caused the breach of the conditions. Both bearing housing and turbine wheel are surely component p....
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....% of export value of export of the specific "products." In our understanding, a plain meaning of words is that any of the products manufactured or exported can be sold in DTA. The only restriction that appears to be that the value of DTA clearances of any of the products should not exceed 90% of FOB value of export of the specific products. The catch here seems to be on the word "products" whereas the policy mentions the same to be specified products. The department wants to read the same down as "product." As seen above, Tribunal has taken a categorical stand on the interpretation of this provision in the case of measure ABI Showatech India, ABI Turnamatics and M/s Consolidated Coin (all supra), in favour of the appellants. IN the case of ABI Showatech the export value of bearing housing machines was only about 25 thousands, whereas value of DTA clearances was about 7crores. The same was held to be valid. 19. We find that EOUs are given a facility to clear the goods in DTA, as a reward for the exports made by them subject to the fulfilment of positive NFE. It may so happen that EOU unit manufacturing more than one product may not be able to export all the products in the ....
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.... extended period of limitation. Revenue sought to enforce the conditions of B-17 Bond. However, the Bond is given in respect of imports or duty free DTA procurements by the appellants. It would no way cover the duty liability if any on the DTA clearances. It is not the case of the department that the demand is of duty of Customs or duty of excise foregone on the raw material imported/procured by the appellants. 21. Moreover, the Revenue has alleged violation of the condition of the notification 23/2003 dated 31.03.2003. The notification refers to the provision of the FTP policy. Development Commissioner who is the implementing authority of the policy has not objected to the clearances made by the appellants in DTA. Under the circumstances, it is to be held that revenue has gone beyond their authority in interpreting the provisions of FTP, following the decision of Delhi High Court in Great ship (India) Ltd. 2016 (338) ELT 545 (Del), where in it was held that 33. There is merit in the contention of the petitioner that in the event of conflict of views between two ministries of the Central Government, the view taken by the ministry that is primarily responsible for the polic....
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....hat case have fulfilled the conditions of Para 6.8 of FTP and the DTA clearances were less than sold 90% of FOB value of specific product within the overall limit 50% of FOB value. However, ongoing through the case law it appears that the department's contention is incorrect. Tribunal has held categorically that even though the value product (bearing Housing) cleared in DTA was more than 90 percent of the value of FOB value of export of the same, the DTA clearances were in order. The figures of export and DTA clearances in that case are as follows. It can be seen that in the instant case, DTA clearances of Bearing Housing Machined were 280035% of the FOB value. Even then Tribunal held that the clearances are in order in view of the provisions of FTP. In the instant case during the period 2009-10 to 2013-14 (up to December 2013), exports of twisted yarn were Rs.66, 68,303/- and DTA clearances were of value Rs.470,37,94,080/- thus DTA clearances were 70,205% of the same. It can be seen that facts of the case are identical. Tribunal also held that Bearing Housing and Precision components were similar goods. In the instant case as per above discussion we held that Twisted yarn and Rope....