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2018 (2) TMI 216 - CESTAT MUMBAI100% EOU - Valuation - SCN alleged that during the period 14.11.2005 to 31.03.2006 they had cleared the goods into DTA in excess of 50% FOB value of exports made during the financial year. That the DTA sale should not exceed the 50% of the FOB value of the exports made during the year in which such DTA Sales is made - benefit of N/N. 23/2003 CE dt 31.03.2003 - Held that: - N/N. 23/2003-CE at Sr.No.2 prescribes concessional rate of duty of 50% of the duty of excise payable under Section 3, subject to fulfillment of the conditions as mentioned at Sr.No.2 to Annexure thereto - the EOU is entitled for DTA sales on quarterly, half yearly or yearly basis subject to permission from the Development Commissioner and the Application for permission is made through bond officer and subject to his verification. On the said basis the permission is granted by the Development Commissioner. The permission is valid for three years from the date of grant of permission. The assessee EOU Unit is thus entitled for DTA sales without having any relation to different DTA Sale permissions which may be different for each quarter or half year or on yearly basis. Thus there is no co-relation between the DTA Sales permissions granted from time to time and actual DTA Sales since it is not mandated in FTP. Once the benefit of DTA Sale has been extended by the Competent Authority i.e Development Commissioner then said benefit cannot be withdrawn. The N/N. 23/2003 CE has been structured so as to ensure the implementation of FTP Policy in its correct prospective. The same cannot be read as to make it contrary to the provisions of the FTP. The permission to DTA sale has accrued to the Appellant Unit based upon its past export performance. If the export of the subsequent year after allowing such DTA Sale is applied in order to restrict this benefit this would lead to situation that the permission for DTA Sale by the Development Commissioner would become redundant. In case where the EOU Unit has become entitled for DTA sale in next year and in said next year it does not export its goods, the DTA sale allowed to him cannot be refused or withdrawn. Once the Development Commissioner has given permission to sell the goods in DTA upto certain value the revenue cannot dispute the same. The goods manufactured by the Appellant from indigenous raw material are eligible for the exemption in terms of Serial no.3 of the notification and the excess demand is not sustainable. Time limitation - Held that: - it cannot be said that the Appellant had any intention to suppress the clearances figures of DTA. There is no implicit or intentional act on the part of the Appellant to suppress the DTA sales figures. It is coupled with the fact that earlier the Appellant were issued SCN on inclusion of cotton waste in 50% FOB value - the demand raised by invoking extended period and the penalty u/s 11AC is not sustainable against the Appellant. Appeal allowed - decided in favor of appellant.
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