TaxTMI 
TaxTMI 
2026 (2) TMI 7
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....anufacturing pharmaceutical products under 'letter of permission (LoP)' issued by the jurisdictional Development Commissioner, had been clearing their manufacture into the 'domestic tariff area (DTA)' on payment of appropriate duties of central excise in accordance with the proviso to section 3 (1) of Central Excise Act, 1944 equivalent to the aggregate duties of customs chargeable on like products when imported into India in terms of the provisions of Foreign Trade Policy (FTP). In doing so, the appellant had availed the effective rate in notification no. 21/2002-Customs dated 1st March 2002 (serial no. 80) towards charge of 'basic customs duty (BCD)' and in notification no. 4/2006-CE dated 1st March 2002 on the 'additional duties of customs' chargeable under section 3 of Customs Tariff Act, 1975 in computation of the duty liability and had not discharged 'special additional duty' chargeable under section 3 of Customs Tariff Act, 1975 by resort to notification no. 23/2003-CE dated 31st March 2003 which was intended only subject to condition of discharge of 'value added tax (VAT)' liability for the recovery of which proceedings were initiated by show cause notice dated 15th April 2....
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....enefit of exemption under section 5A of Central Excise Act, 1944. 6. An 'export oriented unit (EOU)' is entitled to procure raw materials, consumables and capital goods without payment of duties of customs on import and entitlies domestic suppliers to exemption from duties of central excise on local procurement; such availment is subject to achieving 'net foreign exchange positive (NFEP)' obligations by export just as domestic clearances upto benchmarked value limit are; the latter is subject to payment of duties of central excise as specifically provided in section 3 of Central Excise Act, 1944 which varies from that of other manufacturers on determination of value and rates of duty as chargeable on import of like goods. In re Shanta Biotechnics Ltd, disputing the allowing of effective rate of duty in assessment, the Tribunal took note of the findings of the adjudicating authority that '7. The issue involved in this case is whether the duty payable by the assessee respondent shall be determined exactly in the same manner as is done in respect of imported goods, as the clearances effected by the assessee respondent is a 100% export oriented. The provisions of clearances....
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....ndition (1) above will not be satisfied because the reprocessing has not been done in India. Thus, in case of normal imports of reprocessed plastic materials, the importers/domestic manufacturers are liable to pay, among other duties, additional duty for customs (CVD). It, therefore, follows that no CVD exemption will be available when reprocessed plastic materials are cleared in Domestic Tariff Area (DTA) by EOUs and EPZ units. In other words, the plastic processor EOUs/EPZ units are liable to pay, among other duties, excise duty equivalent to CVD payable on imported reprocessed plastic materials (e.g. plastic granules/agglomerates) in respect of their DTA clearances of such materials/goods." The Delhi Court relied upon the decisions of the Supreme Court in Hyderabad Industries [1999 (108) E.L.T. 321 (S.C.)] and Thermax Private Limited [1992 (61) E.L.T. 352(S.C.)] and held as under : "8. As observed in the aforesaid quoted portions by the Apex Court, for the purpose of attracting additional duty under Section 3 of the Tariff Act, on the import of a manufactured or produced article, the actual manufacture or production of a like article in India is not necessary. ....
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....decision of the Hon'ble High Court of Delhi in the case of Plastic Processors is squarely applicable to the facts of this case. In that case, the Hon'ble Court was considering whether 100% EOU clearances to domestic tariff area are required to be charged to CVD or eligible for exemption under Notification No. 6/2000-C.E. dated 1-3-2000, the predecessors notification. After hearing the matter in detail, the Hon'ble High Court quashed the Circular No. 38/2000-Cus. dated 10-5-2000 issued by the Board wherein it was stated that 100% EOU is required to pay excise duty equivalent to CVD payable on imported re-processed plastic materials in respect of their DTA clearances of such materials/goods. Hon'ble Gujarat High Court in the case of Lucky Star International also had taken a similar view. It has to be noted that the 1 explanation was added by issue of Notification No. 48/2001 in October 2001 whereas both these decisions of the High Courts were rendered in the year 2000. The notification as it existed prior to introduction of explanation was interpreted while considering and quashing the Circular No. 38/2000 by two High Courts. Therefore obvious conclusion that emerges is that even tho....