TaxTMI 
TaxTMI 
TaxTMI 
2026 (3) TMI 196
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....nd above per square meter." This condition is applicable for HSN codes 68022310, 68022390, 68022900 and 68029300. 1.1 The officers also found that the appellant was permitted advance DTA sale of total value of Rs. 550 lakhs by the Development Commissioner with certain conditions, such as execution of differential duty bond and clearance in DTA to those units which have import authorization from DGFT for such products. The Revenue has alleged that advance DTA sale are covered at Sr. No. k of para 6.8 of the Import and Export Policy for which concessional duty benefit under Notification No. 23/2003-CE dated 31.03.2003 is not admissible. The benefit of concessional duty on DTA sales is admissible for the sales covered under sub-paras a, b, d & h of para 6.8 of the policy. 1.2 After conducting investigation, Revenue issued them show cause notice dated 07.01.2009 demanding Central Excise duty of Rs. 3,62,43,148/- under Section 11A of the Central Excise Act, 1944 along with interest under Section 11AA and proposal to impose penalty under Section 11AC of the said Act. The notice was decided by the Commissioner vide impugned dated 17.04.2020, wherein he confirmed demand of Central Ex....
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....of imported granite slabs is not legally sustainable. There is no evidence of any manipulation in the transaction value charged by the appellant as sale has been made to independent buyers and price is the sole consideration. The show cause notice also does not allege these charges. * The Provisions related to value of goods contained under Section 14 of the Customs Act, 1962 are applicable for the purpose of assessment of imported goods. Under this Section, CBIC has been empowered to fix tariff value for any class of imported goods or export goods by issue of notification in the official gazette. In the case of Polished Marble slabs, no such Notification has been issued by CBIC fixing tariff value. * Section 14(3) of the Customs Act, 1962 provides that where value cannot be determined under Sub-section (1), Customs Valuation Rules, 2007 may be adopted. The MIP declared by DGFT vide notification dated 26.08.2013, cannot be considered as assessable value of the imported goods because MIP is neither the transaction value under Section 14(1) of the Customs Act, 1962 nor a tariff value determined by the CBIC under Section 14(2) nor a value determined under Customs Val....
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....able, interest cannot be charged from them under Section 11AA of the Central Excise Act, 1944. Likewise, penalty under Section 11AC is also not sustainable as neither the allegation of undervaluation is confirmed nor is there any fraud, suppression of fact, willful misstatement, etc. in the instant case. The appellant therefore, prays for allowing their appeal and setting aside the impugned order of the Commissioner. 3. During hearing, learned Advocate highlighted the grounds taken by them in their appeal. Regarding invocation of extended period for confirming the demand of Rs. 28,59,386/-, he produces copy of letter dated 17.04.2014 issued by the Development Commissioner, Kandla SEZ, showing that a copy of the letter was also marked to the Assistant Commissioner, Central Excise Division, Gandhidham. He also produces copy of letter dated 14.07.2015 of Superintendent Central Excise range ER-IV Bhuj, intimating Deputy Development Commissioner, Kandla SEZ regarding clearance of finished goods valued at Rs. 5,42,62,442/- in DTA sales, during the period from 17.04.2014 to 16.04.2015 on concessional rate of duty. On the basis of these two letters, he submits that the entire issue was ....
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...., in the case of Bony Polymers Pvt. Ltd. Vs. CCE, Delhi-III, reported at 2016 (343) ELT 288 (Trib.) wherein, it was held that goods sold in DTA against advance DTA sales permission are not covered by Notification No.23/2003-CE. This decision has also been upheld by the Hon'ble Apex Court as reported at 2017 (345) ELT A69 (SC). On these grounds, he prays for upholding duty demand of Rs.28,59,386/- against the appellant along with interest as well as penalty. He also justifies invocation of extended period on the ground that the appellant did not mention the correct para of the Foreign Trade Policy in their ER-2 returns showing clearance of goods and also withheld advance DTA sale permission from the jurisdictional range for scrutiny. 5. We have heard the rival submissions. Following two issues emerge in the present matter:- (a) Whether value of granite slabs and tiles cleared by the appellant (a 100% EOU) in DTA sales will be governed by DGFT notification fixing Minimum Import Price (MIP) or under Section 14 of the Customs Act, 1962? (B) Whether benefit of notification No.23/2003-CE dated 31.03.2003 is available to the appellant on advance DTA sales made by it? ....
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.... (cited supra) where the issue was whether DGFT can regulate import or export of goods by issue of policy circulars/ notifications. It was held that the Central Government has powers in public interest to plug the loophole by tinkering with the existing policy by issue of policy circulars and the notifications. In the present case, dispute is regarding value of goods cleared by the appellant in DTA and not the powers of DGFT to issue policy Circulars and Notification. 5.3 As per proviso to Section 3(1) of the Central Excise Act, 1944, duties of excise collected on any excisable goods which are produced or manufactured by a Hundred Percent Export-Oriented Undertaking, 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 (52 of 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 are chargeable by reference to their value; the value of such excisable goods shall, notwithstanding anything contained in any other provision of this Act, be determined in accordance with....
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....ct. The price in the domestic market is driven by lot of factors and when the transaction is between the appellant and unrelated buyer there are no reasons to doubt the said value. The demand of duty is solely based upon the ground and reasoning that the Minimum Import Price fixed by the DGFT of the Marble Blocks is much higher and therefore, the transaction value is not correct. We are unable to appreciate the same. We therefore hold that the impugned order does not sustain. In view of our above findings and discussion, we set aside the impugned order and allow the appeal with consequential reliefs." 5.4 In view of the above, we hold that the department has enhanced value of goods cleared by the appellant in DTA solely on the basis of minimum import price fixed by the DGFT vide Notification No.38 and there is no other evidence or allegation of under valuation of the goods so as to reject the transaction value. In absence of any cogent reason and evidence, we have no hesitation in allowing the contention of the party. Accordingly, we allow the party's appeal on this count and set aside the duty demand of Rs.3,33,83,762/-. 5.5 As regards applicability of Notification No.23/200....
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....d (g) of Paragraph 6.8 of the [Foreign Trade Policy] shall be allowed only when the unit has achieved positive Net Foreign Exchange Earning; and (iv) clearance of goods into Domestic Tariff Area under [sub-paragraph (d)] of Paragraph 6.8 of the [Foreign Trade Policy] in excess of 5% of free on board value of exports made by the said unit during the year (starting from 1st April of the year and ending with 31st March of the next year) shall be allowed only when the unit has achieved positive Net Foreign Exchange Earning." Thus, benefit of this Notification is applicable only to those goods which are cleared in DTA in accordance with para 6.8 (a), (d), (e) and (g) of the Foreign Trade Policy. As Advance DTA sale permitted in this case is governed by para 6.8 (k) of the FTP, benefit of this Notification is not available to these clearances. We therefore hold that the appellant was not entitled to concessional duty benefit under Notification No.23/2003 dated 31.03.2003. 5.7 We further find that the Development Commissioner, Kandla, SEZ, had vide letter dated 17.04.2014 permitted advance DTA sales for Rs.550 Lakhs subject to the following conditions:- 1. The abov....
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....ter of extended period. We further find that the letter dated 14.07.2015, of the Jurisdictional Superintendent provides only the clearance value of goods in DTA on concessional rate of duty and it nowhere indicates the relevant para of the FTP under which DTA sales were being carried out by the appellant. We have also seen some of the ER-2 returns filed by the appellant where they have declared sale in DTA under para 6.8 of the FTP and have conveniently suppressed mentioning of para 6.8(k) of the FTP under which they were granted permission to clear goods in DTA on advance sale basis. Relevant part '4A' of the ER 2 return for the month of September, 2014 is reproduced below. The above return at Sr. 10 contains, "Self-Assessment Memorandum" where at Sr.(a) they have declared that, "I hereby declare that the information given in this Return is true, correct and complete in every respect and that I am authorised to sign on behalf of the assessee." Part '4A' of the ER-2 Return:- 5.9 We rely on the decision of CESTAT Delhi, in the case of Bony Polymers Pvt. Ltd (cited supra) wherein, in para 6, 7, 8, 9, 10 & 11, it was held that for claiming the benefit of Notification No....