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2023 (9) TMI 934 - AT - Customs100% EOU - Refund of excess self-assessed Excise duty - manufactured finished goods and manufactured waste lying in Closing Stock as on 15.10.2009 - debonding from the EOU Scheme vis- -vis its subsequent removal/clearance from the factory to the domestic and export market at a reduced price - HELD THAT - The refund is not arising out of a difference in the rate of excise duty but on account of the value adopted for the purposes of discharge of excise duty on the stock of manufactured FG and waste as in existence on the cutoff date i.e. 15 October 2009. The Ld. Appellate Commissioner accepts that the refund claim was filed within the period of limitation prescribed under the Central Excise Law. However, he has treated the letters dated 2.12.2009 and 30.12.2009 as confirmation of the provisionally assessed excise duty payment by the Appellant resulting in finalization of the value declared by the Appellant. The Appellate Commissioner further observed that subsequent variation in prices of these goods is of no avail either to the Appellant or to the department. The letters dated 2.12.2009 and /or 30.12.2009 were only verifying the duty discharged by the Appellant pursuant to their application for debonding and could not be construed as final assessment order as there was no quantification of any confirmed liability. Moreover, no provisional assessment was sought by the Appellant under Rule 7(1) of the Central Excise Rules and no order finalizing provisional assessment was passed under Rule 7(3) of the Central Excise Rules. On going through the provisions, of Appendix 14-I-L, it is found that in terms of Note-(ii) to this Appendix, a 100% EOU must be continued to be treated as EOU/EHTP/STP unit till the date of final exit order. Based on this note, the Tribunal in the cases of COMMR. OF CUS. C. EX., VADODARA VERSUS SOLITAIRE MACHINE TOOLS P. LTD. 2002 (11) TMI 165 - CEGAT, MUMBAI has held that a unit would continue to be treated as EOU unit till the date of final exit order and would be subject to monitoring of the stipulated obligations under the relevant schemes. During the intervening period between the date of no objection certificate by the Central Excise Authorities and the date of issue of final debonding order by the Development Commissioner, an EOU can export the finished goods under claim for advance authorization/DEPB/duty draw back and that no excise duty can be charged in respect of such goods as the same have not been cleared into DTA. In view of this, the impugned order rejecting the refund claim is not sustainable. The same is set aside. The appeal is allowed.
Issues Involved:
1. Refund of excess paid excise duty on manufactured goods upon exiting from Export Oriented Unit (EOU) Scheme. Summary: The appeal was against the Order-in-Appeal rejecting the refund claim filed by the Appellant against the Order-in-Original. The Appellant, a 100% EOU engaged in manufacturing and exporting PET Resin, decided to exit from the EOU Scheme, leading to the payment of applicable Customs and Excise duties. The Appellant self-assessed the duty liability on stock, including finished goods and waste, at the cut-off date. The stock was later cleared for domestic and export markets at a reduced price, resulting in an excess payment of Excise duty. The refund claim was rejected, leading to the appeal. The Appellant challenged the Order-in-Appeal on various grounds, including the application of excise law, the requirement for duty discharge upon removal from the factory, absence of final assessment orders, and cited relevant case laws supporting their claim. The issue for consideration was the refund of excess excise duty paid on manufactured goods upon exiting the EOU Scheme and subsequent clearance from the factory. The Appellant discharged excise duty on the stock at the cut-off date, which was later cleared for domestic and export markets. The Appellant filed a refund claim based on the difference in the value adopted for duty discharge and the ultimate selling price. The Appellate Commissioner accepted the claim within the limitation period but considered the duty payment as final, disregarding subsequent price variations. The Tribunal found that the verification letters were not final assessment orders, no provisional assessment was sought, and cited a case supporting the refund claim. It emphasized that the EOU unit continued to function as a DTA unit until the final exit order, allowing export without excise duty on goods not cleared into DTA. The Tribunal set aside the Order-in-Appeal and allowed the appeal, granting consequential relief to the Appellant.
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