9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (7) TMI 485 - AT - Central Excise100% EOU - Goods cleared by the EOU for sale within India - duty-free inputs (both imported and indigenous) - Inputs not used for Manufacture of goods - Inputs used for manufacture of exempt goods - Claim of alternative benefit of exemption notification which is not the part of SCN - HELD THAT - the noticee is not estopped from putting forth other grounds of defence and if he does so, fairness requires that they are also considered. We therefore find in favour of the appellant as far as the question as to whether the new exemption notifications not being the subject matter of the SCN can be raised as a point of defence at this stage of appeal. Evidently if the goods are otherwise covered by another exemption notification and the appellant is entitled to such exemption notification fairness requires that such benefit should be given to the appellant. Benefit of exemption where the EOU is registered with Excise Department - Scope of CBEC circular given relaxation from registration - HELD THAT - as far as the exemption notifications issued by the Government are concerned they are clearly in the nature of sub-ordinate legislations. We do not think that a letter issued by the CBEC can enlarge the scope of the exemption notifications thereby truncating the scope of taxation levied by the Parliament. Even if it is presumed that CBEC had such power these letters are not subject to scrutiny and review by the Parliament. The exemption given by the CBEC by way of a letter was only to the extent of avoiding two registrations but no exemption has been given with respect to following remaining conditions of the Rules to be followed. In view of this the appellant is not entitled to benefit of the exemption notification 24/2005-CUS or 132/2006-CUS in respect of the inputs procured by them. Benefit of exemption notification 06/2006-CE dt.01.03.2006 - HELD THAT - What is claimed is an exemption available for parts consumed within the factory of production of such parts for manufacture of goods specified at Sl.No.1-20 above (Sl.No.21 List-5 read with Sl.No.84 of the table). Clearly there is no dispute with regard to the parts manufactured by the appellant and consumed within their factory. What is in dispute is that the parts which they have procured either by importing or from other indigenous suppliers those are not consumed within the factory of production. There is no exemption for such parts. Therefore the appellant is also not entitled to the benefit of exemption notification 06/2006-CE. Imposition of penalties u/r 25 of the Central Excise Rules 2002 - HELD THAT - The learned Commissioner imposed penalties under Rule 25 of the Central Excise Rules 2002 read with Section 11AC of the Central Excise Act 1944 without specifying as to which particular clause of Rule 25 has been contravened by the appellant. None of the show-cause notices mentioned regarding the violation of particular clause of Rule 25 - the penalties imposed under Rule 25 which is pari materia to erstwhile Rule 173Q is set aside. Imposition of penalties u/s 114A of the Customs Act 1962 - HELD THAT - In all the 4 show-cause notices issued to the appellant penalty was proposed under Section 112 of the Customs Act 1962 but while passing the impugned order the learned Commissioner imposed penalty under Section 114A of the Customs Act by observing in para 5.12.5 of the impugned order that the provision of Section 114A of the Customs Act is more appropriate in the present case - it is settled law that any penalty not proposed in the show-cause notice cannot be imposed Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Jurisdiction of the adjudicating authority. 2. Eligibility for exemption notifications on inputs for 100% Export Oriented Units (EOUs). 3. Applicability of other exemption notifications not originally claimed. 4. Imposition of penalties under Rule 25 of Central Excise Rules, 2002 and Section 114A of the Customs Act, 1962. Analysis: 1. Jurisdiction of the Adjudicating Authority: The appellant contested the jurisdiction of the adjudicating authority due to the issuance of Show Cause Notices (SCNs) by different commissioners. The Departmental Representative clarified that the reorganization of Commissionerates led to all matters being decided by the Commissioner of Central Excise, Durgapur. The appellant did not press this point further, and it was not disputed that the appellant’s final products were exempt from duty. 2. Eligibility for Exemption Notifications on Inputs for 100% EOUs: The appellant, a 100% EOU, imported inputs claiming benefits under exemption notifications No.52/2003-CUS and 22/2003-CE. The final products were cleared in the Domestic Tariff Area (DTA) without payment of duty due to exemptions. The core issue was whether the appellant was entitled to duty-free inputs under these notifications when the final products were non-excisable (exempt from both basic customs duty and additional duty of customs). The Tribunal noted that the Foreign Trade Policy defined non-excisable products as those with 'NIL' basic customs duty and CVD, thus disqualifying the appellant from the claimed exemptions. 3. Applicability of Other Exemption Notifications Not Originally Claimed: The appellant argued that even if they were not eligible for the originally claimed notifications, they were entitled to other notifications (Nos.24/2005-CUS, 132/2006-CUS, and 06/2006-CE). The Tribunal examined these claims: - Notification No.24/2005-CUS and 132/2006-CUS: These exempted final products unconditionally but required compliance with Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996 for inputs. The appellant did not follow these rules, and a 2017 CBEC clarification exempting dual registration did not waive other procedural requirements. - Notification No.06/2006-CE: This exempted parts consumed within the factory of production. The appellant’s imported or purchased parts were not covered as they were not produced within their factory. 4. Imposition of Penalties: - Under Rule 25 of Central Excise Rules, 2002: The Tribunal found that the penalties were imposed without specifying the contravened clauses in the SCNs, violating the principles established in the case of Amrit Foods v. CCE, UP. Thus, the penalties were set aside. - Under Section 114A of the Customs Act, 1962: The SCNs proposed penalties under Section 112, but the Commissioner imposed penalties under Section 114A, which was not tenable as per established legal principles. Thus, these penalties were also set aside. Conclusion: The Tribunal upheld the demands for duties on inputs as the appellant was not entitled to the claimed exemptions. However, penalties under Rule 25 of the Central Excise Rules, 2002 and Section 114A of the Customs Act, 1962 were set aside due to procedural improprieties. The rest of the impugned order was upheld. The appeal was disposed of accordingly.
|
