AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (4) TMI 60
X X X X Extracts X X X X
X X X X Extracts X X X X
.... raw-materials and consumables were received in their factory at Attibele for manufacture of polished granite slabs. Alleging that polished granite slabs, manufactured out of imported /locally procured slabs were cleared into DTA without payment of basic customs duty leviable on such goods under Section 3(5) of the Customs Tariff Act, 1975, investigation commenced and show cause notices were issued. Based on the above said allegation, Adjudication authority confirmed the demand. Aggrieved by said orders, present appeals are filed. Appeal Nos. E/21692/2014 pertains to the period from October 2011 to December 2011, E/21675/2014 pertains to the period from January 2012 to October 2012 and E/22330/2014 pertains to the period from November 2012 to October 2013. 3. When the appeals came up for hearing, Learned Counsel for the Appellant submits that the Appellant is a 100% EOU for which LOP was granted by the Development Commissioner, SEZ Cochin vide Letter No. l/19/2003:PER:EOU:CSEZ dated 21.03.2003 as amended by Letter No. l/19/2003:EOU:CSEZ dated 30.9.2008. The unit has been importing Marble Blocks since 2005 and after processing the same into Marble Slabs, the same are exported. Th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....icated and Learned Counsel further submits that the payment of duty on Granite Slabs cleared to DTA during the period December 2008 to January 2009 was the subject matter of correspondence between the Superintendent of Customs, EOU-III and Appellant. In his letter C. No. VIII/40/29/2003-EOU-III dated 9.11.2009, the said Superintendent EOU-III pointed out that the rates of duty applied while clearing the goods to DTA is not as per Sl. No. 2 of the table mentioned in Notification No. 23/2003-CE dated 31.3.2003, as amended, which has resulted in short payment of duty of Rs. 3,92,362/. In response, Appellant vide their letter dated 5.12.2009 clarified that the said granite slabs are manufactured out of Granite Blocks procured locally (approximately 85% of the procurement are local and the balance is imported) and Sl. No. 2 of the said Notification No. 23/2003CE dated 31.3.2003 does not get attracted. The Superintendent of Customs, EOU-III vide his letter dated 16.3.2009 addressed to Appellant pointed out that there is short payment of duty amounting to Rs. 10,63,987/-, since the differential Excise duty payable is 8.24%. In his further letter dated 25.1.2010 the said Superintendent of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....slabs purchased locally, finished granite slabs exported and cleared to the DTA on payment of duty. The data relating to granite blocks imported and procured from the DTA in Cubic Meters (CBM) has been compiled from the computer system (Tally Package) maintained by the Appellants. The values adopted for the same have been taken from Audited Balance Sheets of the Company for the relevant years and the finding in the impugned order is based on the data relating to granite slabs purchased locally and finished granite slabs exported and cleared to the DTA has been compiled from the computer system (Tally Package) maintained by the Appellants. The values adopted for the same have been taken from Audited Balance Sheets of the company for the relevant years. The appellants also submit that the finished granite slabs have been exported by processing granite blocks imported as well as procured from the DTA. The granite slabs purchased locally have been subjected to value addition and exported. While compiling the above data, Learned Counsel submits that:- i. Granite Blocks imported /purchased in DTA are in Cubic Meters ii. Granite Slabs procured locally, exported and clear....
X X X X Extracts X X X X
X X X X Extracts X X X X
....CE, Lucknow - 2009 (238) E.L.T. 196 (Tri.-Del.) 4. Cipla Ltd. Vs. CC, Chennai - 2007 (218) E.L.T. 547 (Tri.Chennai) 5. Modi Xerox Ltd. Vs. CCE, Meerut - 1997 (94) E.L.T. 139 (Tribunal) 10. As regards the condition 4; "by way of informing the proper officer" Learned Counsel submits that it is not a vesting condition to operate as mandatory but directory in nature. In this regard, Learned Counsel draws our attention to the judgment of Hon'ble Supreme Court in the matter of M/s. Mangalore Chemicals and Fertilizer Ltd. Vs. Deputy Commissioner-1991 (55) E.L.T 437 (SC) in which they have inter alia observed that "there are conditions and conditions, some may be substantive, mandatory and based on considerations of policy and some others may merely belong to the area of procedure. It will be erroneous to attach equal importance to the non-observance of all conditions irrespective of the purpose they were intended to serve as complied conditions. 11. As regards under valuation, it is alleged that while removing the granites slabs to DTA, Appellant had adopted value for payment of duty arbitrarily and not in accordance with Customs Valuation Rules. In this regard, Le....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ut they have similar characteristics and are used for the same purpose. Similar goods being imported by other third parties from the same countries of origin and therefore comparison adopted for such value to the impugned goods". In this regard, the Learned Counsel submits that the prices at which the Appellant sold both marbles and granites slabs to M/s. HMG are almost at par with the prices of identical marbles and granites slabs sold, cleared to third parties. Further as per the evidence on record, quantum of marbles and granite slabs purchased by M/s. HMG from Appellant is only 10% of their total turnover and rest 90% of their requirement is purchased from other suppliers of marbles and granites slabs. The learned Counsel further submits that Appellant is a proprietary firm of which Shri. Anand Reddy, M.G. is the sole proprietor. Whereas M/s. HMG is a partnership firm of which Shri. Anand Reddy M.G and Shri. Vishwanath Reddy M.G. are the partners of which the former is the Managing Partner. A partnership firm and a proprietary firm are two different legal entities in the eyes of law. In this connection, the Appellants would like to refer to and rely upon CBEC Circular No. 06/19....
X X X X Extracts X X X X
X X X X Extracts X X X X
....KN Sinter Metals Limited Vs. CC, Pune - 2008 (232) E.L.T. 692 (Tri.-Mumbai) 3. Rashesh & Co. Vs. CC (I), Mumbai - 2008 (227) E.L.T. 573 (Tri.-Mumbai) 4. Balakishan Dass & Sons Vs. CC, New Delhi - 2001 (129) E.L.T. 706 (Tri.-Del.) affirmed by the Hon'ble Supreme Court as reported in 2001 (133) E.L.T. A164 (S.C)] 5. CC, Calcutta Vs. South India Television (P) Ltd. - 2007 (214) E.L.T. 3 (SC) 15. Learned Counsel further submits that when similar allegations were made by the Respondent in appellant's own case regarding valuation, as per Final order No. 20862/2025 dated 19.02.2025, this Tribunal held that: "15. As regards the activity whether it amounts to manufacture, Learned Counsel relied on the judgment of Hon'ble Supreme Court in the matter of M/s Aman Marble Industries, wherein it does not amount to manufacture till 01.03.2006. As regarding valuation also, we find that impugned order is considering Rule 8 of Customs Valuation Rules, 1988, whereas while issuing the show cause notice, Section 4 of the Central Excise Act read with Rule 11 of the Central Excise Valuation (Determination of price of excisable goods) Rules, 2000 was invoked. Though t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....taxmann.com 68 (SC). Relevant para is reproduced below: "24. This being the case, it is obvious that the beneficial purpose of the exemption contained in Section 3(1)(b) must be given full effect to, the line of authority being application to the facts of these cases being the line of authority which deals with beneficial exemptions as opposed to exemptions generally in tax statutes. This being the case, a literal formalistic interpretation of the statute at hand is to be eschewed. We must first ask ourselves what the object sought to be achieved by the provision and construe the statute in accord with such object. And on the assumption that if any ambiguity arises in such construction, such ambiguity must be in favour of that which is exempted. Consequently, for the reasons given by us, we agree with the conclusions reached by the impugned judgements of the Division Bench and the Full Bench." 17. The Learned Authorised Representative (AR) for the Revenue reiterated the finding in the impugned order and submits that the Appellant was required to pay differential duty arising out of nonpayment of basic customs duty on DTA clearance of polished granites, since they failed....
X X X X Extracts X X X X
X X X X Extracts X X X X
....plied to determine the value of impugned goods. Thus, Adjudication Authority proceeded to Rule 9 of the Valuation Rules, which is the residual method based on best-judgement. 19. As regards reliance on the data /information in the form of screen shot prints of Bills of Entry, it is provided only as an opportunity to have a reasonable perception of price of imported contemporaneous goods, from which it could be easily made out that the unit price adopted by the Appellant is very low and thus there exists under-valuation causing undue loss of revenue. Hence, Adjudication rightly took the contemporaneous import price as the one applicable to the DTA clearance of the Appellant to M/s. HMG in the overall circumstances of the case which should be most reasonable and appropriate in terms of Rule 9 of the Customs Valuation Rules. 20. Heard both sides and perused the records. 21. We find that as regards denying exemption from BCD on DTA clearance by EOU, Appellant is a 100% EOU and manufacturing 'polished granite slabs' and 'marble slabs'. As regards clearance of marble slabs to DTA, we find that as per the evidence on record, it was allowed on the basis of the directions given by ....