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2016 (4) TMI 771 - AT - Central ExciseDemand of differential duty - on finished goods lying in stock - at the time of debonding of the E.O.U. - Denial of exemption under Notification No.23/2003-CE dated 31.03.2003 - Appellant contended that no benefit has been availed by E.O.U. on the finished goods themselves and once the benefit availed on inputs, consumables and capital goods are surrendered then for all purposes, the unit becomes a normal DTA Unit. Held that:- we are unable to agree with the submission made by appellant that language employed in the foreign trade policy continued to be allowed to be sold in India and the amendment brought in 2001 has not materially changed the situation. The Foreign Trade Policy apparently deals with the goods which are allowed to be sold in India by an E.O.U. in terms of the policy and the same is applicable to a functioning E.O.U. It cannot be said that such expression in the Foreign Trade Policy applies to the finished goods lying in stock when the E.O.U. intents to exit the scheme itself. It is noticed that the final debonding and conversion of E.O.U. to a D.T.A. Unit is legally permissible only on discharging all the duty liabilities on capital goods, raw-materials, finished goods etc. lying in the E.O.U. In such a situation, it is not legally tenable to argue that the rate of duty applicable to a normal Central Excise Unit should be applicable to a E.O.U. even before the E.O.U. becomes a normal Central Excise Unit. Imposition of penalty - Rule 25 of Central Excise Rules 2002 - Held that:- the rate of duty applicable on the finished goods lying in an E.O.U. at the time of debonding involves interpretation of legal provision and applicability of various case laws. So, it is not a fit case for penal action. - Decided against the revenue
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