TMI Blog2004 (12) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... r (T)]. - These are three appeals filed by 1. M/s. Maruti Cottex Limited (Appeal No. E/309/2004); 2. M/s. Sanghi Spinners India Ltd. (No. E/1110/2003) and 3. M/s. Manasa Industries (P) Ltd. (in E/28/2003). These appeals are against the Orders-in-Original Nos. 1. 63/2003 Commr, dated 17-12-2003; 2. C.Ex. 40/2003, dated 30-7-2003; and 3. 63/2002-RP dated, 22-10-2002 passed by the Commissioner of Central Excise, Hyderabad-III Commissionerate, Hyderabad in respect of the first two appeals and by the Commissioner of Central Excise, Visakhapatnam in respect of the third appeal. 2. All the three appellants are 100% EOUs. The first two appellants cleared the goods without payment of duty to DFRC/ARO holders. The third appellant cleared the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional Duty. However, such inputs shall be subject to payment of Additional Customs Duty equal to the Excise Duty at the time of import. There is a provision for the DFRC holder to source the inputs from indigenous sources also in view of direct import against Advance Release Orders (ARO). The DFRC is freely transferable and a transferee is also eligible for ARO facility. In the instant case, the 100% EOUs i.e. the appellants have supplied goods against AROs. Shri Shiva Dass contended that under Notification No. 82/92-C.E., dated 27-8-1992 and Notification No. 28/01-C.E., dated 16-5-2001, the clearances made to the DFRC holders are exempted from only Basic Customs Duty and Special Additional Duty. However, these clearances have to pay count ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbai in the case of CCE, Mumbai-III v. Shrishti Impex Pvt. Ltd. [2003 (156) E.L.T. 893 (Tri. - Mumbai)] wherein the same issue has been dealt with. The facts of the above-mentioned case are similar to the case before this Tribunal. The Hon'ble Tribunal has held that clearance of goods by 100% EOU against DFRC are not covered under relevant para of the EXIM Policy relating to permissible DTA sales and also not covered by the expression "allowed to be sold in India" in Section 3 of the Central Excise Act, 1944 so as to bring such clearances out of ambit of exemption under Notification. In the above-mentioned case, the Tribunal has rejected the stay of operation of the order of the Commissioner (Appeals) who has held that Notification No. 125/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "b(vi) Para 9.10 of the policy consists of series of deeming provisions. One of such provision is that the supplies to domestic tariff areas made against payment in foreign exchange shall be counted towards fulfilment of export performance. The object behind the provision of Para 9.10 appears to be earning foreign exchange. Therefore, the goods manufactured in 100% EOU appears to have been exempted from payment of Central Excise duty under Notification No. 125/84, dated 26-5-1984. However, the goods cleared by the assessee are neither earning foreign exchange nor revenue for exchequer. This may not be the intention of the Government. Therefore, the decision of Commissioner (Appeals) passing the benefit of exemption Notification No. 125/84, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst foreign exchange cannot be treated on par with the clearances permitted by the Development Commissioner for sale to DTA. Since supplies in DTA against foreign exchange covered by para 9.10(b) shall be counted against NFEP/EP, these clearances cannot suffer Central Excise Duty. Hence, Notification No. 125/84 is squarely applicable to these clearances. Moreover, even if duty is paid on these clearances, by virtue of the fact that they are considered as deemed exports vide Chapter 10 of EXIM Policy, the appellant would be entitled to the benefit of refund of Terminal Excise Duty. Hence, the whole exercise appears to be revenue neutral. In view of these observations, we allow the appeals with consequential relief. - - TaxTMI - TMITax - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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