TaxTMI 
TaxTMI 
2003 (9) TMI 200
X X X X Extracts X X X X
X X X X Extracts X X X X
....use in the 100% EOU. M/s. ALSA had imported the goods listed in Annexure (b) A to the show cause notice without payment of customs duty as per Notfn. No. 13/81 Cus. dated 9-2-81. They also obtained Indigenous goods without payment of Central Excise Duty leviable thereon as detailed in Annexure B to the show Cause Notice, as per Notfn. No. 123/81-C.E. dated 2-6-81, 57/94-C.E. dated 1-3-94 and 1/95-C.E. dated 4-1-95 on the strength of CT-3 certificates issued by the Superintendent Central Excise of the concerned Range Office. The Head Office of M/s. ALSA in the normal course of (c) their business applied for and obtained several Advance Licenses under the DEEC Scheme from the DGFT in the name of M/s. ALSA Marine & Harvests Limited, Chennai. As per Chapter VII of the EXIM Policy 1992-97, an Advance Licence is granted for the duty free import of the inputs. Based on an information that the 100% EOU of M/s. (d) ALSA at Bhimli had unauthorisedly and clandestinely removed the products manufactured by them to the DTA and that the said goods were subsequently exported in the name of M/s. ALSA Marine & Harvests Ltd., Chennai, under the DEEC Scheme in fulfilment of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o be liable to pay the customs duty amount of Rs. 27,53,915.00 as indicated in Annexure-A to the Show Cause Notice. (vi) The 100% EOU of M/s. ALSA appeared to have procured different goods of indigenous origin without payment of central excise duty vide Notfn. No. 123/81-C.E., dated 2-6-81, 57/94-C.E., dated 4-1-95 and 1/95-C.E., dated 4-1-95. The said goods were allowed to be procured duty free on the strength of CT-3 certificates subject to the observance of the different conditions stipulated in the notifications referred to above. Since M/s. ALSA failed to observe the conditions of the aforesaid notifications, in so far as they failed to export 100% of such other percentage as fixed, of the goods manufactured wholly or partly from the said goods and instead used the said goods in the manufacture and clearance of articles for DTA sales. It appeared that the said goods as listed in Annexure-B to the Show Cause Notice were liable for confiscation under Rule 173Q(1)(b) of the C.E. Rules 1944 and M/s. ALSA were liable for penalty under Rule 173Q(i) ibid. They also appeared to be liable to pay central excise duty amounting to Rs. 2,77,430/- paya....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(1) of the Central Excise Act, 1944 appeared to be applicable for raising the demand on the goods received in their 100% EOU without payment of duty. (f) Hence, a Show Cause Notice C.No.V/15/30/43/97-Adj. dated 12-12-97 was issued to M/s. ALSA, requiring them to show cause as to why :- (i) an amount of Rs. 27,53,915.00 being the duty of customs payable on the goods imported by them under Notfn. No. 13/81-Cus., dated 9-2-81 should not be demanded from them under the proviso to Section 28(1) of the Customs Act, 1962 and in terms of the bond executed by them; (ii) an amount of Rs. 2,77,430.00 being the Central Excise duty payable on the goods received by them duty free under CT-3 certificates should not be demanded from them under the proviso to Section 11A(1) of the Central Excise Act, 1944 and in terms of the bond executed by them; (iii) an amount of Rs. 4,34,79,737.10 being the duty of excise payable on the marine products cleared to the DTA by them without payment of duty should not be demanded fro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....100% EOU of M/s. ALSA at Bhimli also, being a hundred percent EOU, are under legal obligation to export their products and to bring in foreign exchange to the country. Hence, as per the law, the Advance licence (DEEC) holders and the hundred percent EOU have the individual and independent obligation to export goods and to bring in foreign exchange to the country. (d) M/s. ALSA Marine & Harvests Ltd., Chennai, being a unit in the DTA, are required to export goods from the DTA, in discharge of their export obligation. Similarly, M/s. ALSA at Bhimli, being a hundred percent EOU, are required to export goods from the EOU, in discharge of their export obligation. The line of demarcation, role and responsibilities of both the DEEC holder (DTA) and the hundred percent EOU are well defined. When a consignment originating from hundred percent EOU is exported by a unit in the DTA, it cannot be said that both of them have complied with the export obligation on them. There is only one export and only one of them can claim credit for the said export. Since the goods in question were not exported in the name and account of the 100% EOU of M/s. ALSA at....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f duty under Heading 03.01 of the Schedule to the Central Excise Tariff Act, 1985. Since 'Nil' rate has to be considered as a rate of duty, the above products are subject to a duty of excise. Therefore, it is clear that shrimps and other marine products are excisable goods. In the Customs Tariff, shrimps and prawns fall under Heading 0306.13 and are chargeable to duty @ 10% ad valorem. (i) It was also argued that no duty was payable on the goods in question as they were not used for home consumption. As per Section 3 of the Central Excise Act, 1944, the duties of excise shall be levied and collected on all excisable goods which are produced or manufactured in India. As per Rule 9 of the Central Excise Rules, 1944, no excisable goods shall be removed from any place where they are produced or manufactured, whether for home consumption or export, until the excise duty leviable thereon has been paid. If the goods in question were exported under cover of a shipping bill prepared in the name of the 100% EOU, the argument of M/s. ALSA would have been relevant. In the instant case, the goods in question were not covered under any of the do....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nce the Development Commissioner, VEPZ had held that they had not fulfilled export obligation, they are liable to pay the duty on the above said imported goods cleared duty free. Though M/s. ALSA agreed to pay the customs duty payable on the above said goods, they did not come forward to pay up the amount. The total customs duty amount payable on the abovesaid imported goods works out to Rs. 27,53,915/-. As per Section 111(o) of the Customs Act, 1962, any goods exempted, subject to any condition, from duty of any prohibition in respect of the import thereof under the Customs Act, 1962 or any other law, in respect of which the condition is not observed unless the non-observance of the condition was sanctioned by the proper officer, is liable for confiscation. In the instant case, the goods in question were allowed to be cleared duty free on the condition that M/s. ALSA would fulfil the export obligation. The BOA for 100% EOU turned down the request of M/s. ALSA for shifting their 100% EOU status to 1-4-96 onwards. The Development Commissioner VEPZ also rejected the request made by M/s. ALSA to permit them to fulfil the export obligation part, which was accounted against Advance Lice....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(b) of the Central Excise Rules, 1944. M/s. ALSA are also liable for penalty under Rule 173Q(1)(b) of the said rules. (m) From the above discussions it is clear that M/s. ALSA had cleared the goods manufactured in their 100% EOU to the DTA without payment of duty and without raising any invoice and without following the stipulated procedure for such clearance. They have also suppressed the fact of clearance of the said goods in the DTA without payment of duty from the knowledge of the department. Chapter VA of the Central Excise Rules, 1944 prescribes the procedure for removal of excisable goods for home consumption from an FTZ or from a hundred per cent export oriented undertaking. In the present case M/s. ALSA did not observe the different procedures prescribed in the rules such as :- • They did not indicate the value of goods and duty involved separately in the invoice and they did not forward the triplicate copy of the invoice to the proper officer within 24 hours of the removal of goods as prescribed under Rule 100D of the Central Excise Rules, 1944. • ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....thing in this Chapter shall apply to a manufacturer or producer who has been allowed to discharge his duty liability in accordance with the provisions contained in Sec. C-I, E-III, E-VI OR E-IX of Chapter V or to whom the provisions of Chapter V-A apply." Therefore, penalty and confiscation as levied and ordered by the ld. Commissioner under the provisions of Rule 173Q cannot be upheld since Chapter VA of the Central Excise Rules, 1944 apply to removal from an EOU unit. Therefore, penalties and confiscations arrived at under Rule 173Q(1) are required to be set aside. (b) Notification No. 125/84-C.E. dated 26-5-84 exempts goods manufactured in India in a EOU from whole of the duties levied thereon under Sec. 3 of the Central Excise Act with the following proviso : "Provided that the exemption contained in this notification shall not apply to such, goods if allowed to be sold in India." In this view of the matter, no Central Excise duty could be levied on goods cleared in this case from ALSA, EOU at Bhimli, as arrived by the ld. Commissioner, even if goods are held to be removed lo Chennai, since such removals admittedly was not a....