TaxTMI 
TaxTMI 
2026 (2) TMI 470
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.... said product. 1.1 After examining their reply, department found that the appellant had improperly availed the benefit of above notification and therefore, they were issued a show cause notice on 10.03.2017 proposing recovery of short paid central excise duty of Rs. 3,90,82,282/- on excess DTA clearances, under Section 11A(4) along with applicable interest and penalty under Section 11AC(1)(c) of the Central Excise Act, 1944. In adjudication proceedings, the Commissioner, CGST and Central Excise, Vadodara-II vide impugned order dated 26.06.2019 confirmed the above Central Excise duty demand along with interest and imposed a penalty equal to 50% of the duty amount under the proposed Section. Aggrieved with this order, the appellant filed appeal before this Tribunal. 2. In their appeal, appellants have taken the following grounds: - (i) The main allegations of the department are: - a) Some of the products sold in DTA were more than 90% of the FOB value of export of that product. b) DTA clearance of dis-similar products at concessional duty rate. c) Some of the products were sold only in DTA on a concessional duty rate and were never exported. ....
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....in the country in which the goods being valued were produced; and produced by the same person who produced the goods being valued, or where no such goods are available, goods produced by a different person, but shall not include imported goods where engineering, development work, art work, design work, plan or sketch undertaken in India were completed directly or indirectly by the buyer on these imported goods free of charge or at a reduced cost for use in connection with the production and sale for export of these imported goods. " (vii) Vide circular No. 85/95-Cus dated 26.07.1995, CBEC had clarified and issued guidelines to check similarly of goods. However, this circular has since been rescinded by issue of circular No. 07/2006-Cus dated 13.01.2006 which also elaborates on "Similar goods" as under:- "paragraph 6.8 (a) of the FTP provides that EOU/EHTP/STP may sell goods upto 50% of FOB value of exports in DTA on payment of concessional duty subject to fulfilment of positive NFE. It also provides that within the entitlement of DTA sale, the unit has to sell in DTA its products similar to the goods, which are exported or expected to be exported....
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....;.Τ. 17 (Guj.) • Amitex Silk Mills Pvt. Ltd. Versus Commissioner of Central Excise, Surat-I 2006 (194) ELT 344 (Tri.- Del.) • Commissioner Versus Metflow Cast Pvt. Ltd. 2016 (331) E.LT. 355 (Guj.) • Commissioner Versus Metflow Cast Pvt. Ltd. 2016 (331) E.LT. 355 (Guj.) • Nandan Synthetics Pvt. Ltd. Versus Commissioner Of C. EX. & S.T., Daman 2015 (315) E.L.T. 454 (Tri. - Ahmd.) (ix) They are eligible for quarterly DTA sale entitlement. Learned Adjudicating authority has calculated DTA entitlement without considering carried forward entitlement of the last quarter. (x) The show cause notice was issued on 10.03.2017 alleging suppression of facts for demanding duty for the period from April 2011 to February 2014 which is beyond the normal period of two years alleging suppression of fact. Extended period of limitation is not invokable in their case as they have been regularly filing ER-2 returns, quarterly and annual performance report as well as filing intimation letters to the Development Commissioner before each DTA clearance. He relied on the decision of Hon'ble Gujart High Court in the case of Commissioner V....
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....tification 23/2003 to impress that they have not breached any of the conditions of Foreign Trade Policy or the related notifications issued by CBIC. A wrong case has been made against them for demanding differential duty which is not payable if FOB value of Deemed exports is added to FOB value of physical exports for determining DTA sales entitlement and their carried forward DTA sales entitlement is also allowed. The goods cleared in DTA are similar to goods exported by them and therefore, if all these factors are considered, no differential duty demand remains against them. He also mentions that extended period is not invokable in this case as they have been filing regular returns with the department. He also submitted following case laws to support his case and prayed to allow their appeal :- • Commissioner of Central Excise, Bangaluru Vs. Global Green Company Ltd - 2022 (381) ELT 639 (Kar.) • B. R. Steel Products Pvt Ltd Vs. Commissioner of C. Ex., Navi Mumbai- 2021 (378) ELT 356 (Tri.-Mumbai) • ABI Turnamatics Vs. Commissioner of GST & C. Ex., Chennai- 2019 (366) ELT 1048 (Tri.- Chennai) 4. Learned AR on the other hand reiterated the f....
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....eared in DTA only and the same were never exported by the appellant which is a clear violation of FTP and concessional notifications. 5. We have heard the rival submissions. We find that the main issues in this case are: a) Whether FOB value of deemed exports is liable to be added to physical exports for determining DTA sales entitlement? b) Whether goods can be sold/cleared in DTA by more than 90% of the FOB value of export of a particular product? c) Whether goods sold by the appellant in DTA are similar to those exported by him or, are there any goods which were only cleared in DTA? d) Whether extended period is rightly invoked for in the case demanding duty for the larger period? 5.1 We find that the appellant has claimed and also supported by various case laws that FOB value of deemed exports should be included in FOB value of physical exports for determining the DTA sales entitlement. We have gone into various case laws and find that the contention of the appellant is correct. In the case of M/s Shree Rohini Enterprises Vs Commissioner of Central Excise, Surat-I, this tribunal vide order reported at 2017(346)E.L.T.(461 held that the v....
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....roducts (a) Units, other than gems and jewellery units, may sell goods upto 50% of FOB value of exports, subject to fulfilment of positive NFE, on payment of concessional duties. 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. However, units which are manufacturing and exporting more than one product can sell any of these products into DTA, upto 90% of FOB value of export of the specific products, subject to the condition that total DTA sale does not exceed the overall entitlement of 50% of FOB value of exports for the unit, as stipulated above. No DTA sale at concessional duty shall be permissible in respect of motor cars, alcoholic liquors, books, tea (except instant tea), pepper & pepper products, marble and such other items as may be notified from time to time. (k) In case of new EOUs, advance DTA sale will be allowed not exceeding 50% of its estimated exports for the first year, except pharmaceutical units where this will be based on its estimated exports for the first two years." We find that there is a limit on DTA sale of any specific product not more than 90% ....