TMI Blog2012 (6) TMI 459X X X X Extracts X X X X X X X X Extracts X X X X ..... re an SSI unit, availed concession under Notification No.1/93-CE as amended. They declared a turnover of over Rs.2.73 crores for the financial year 1994-95 excluding Rs.32,83,894/- being the value of "deemed exports" during the period 1994-95. The department was of the view that the value of "deemed exports" cleared to M/s.MRF Ltd., had to be taken into account for computation of the aggregate value of clearances for SSI exemption under the notification, and in that case the total turnover value exceeded the limit of Rs.3 crores by Rs.6,19,096/-. Show-cause notice proposing recovery out of Rs.5,75,046/- was therefore issue on 14.09.1995. The notice also proposed imposition of penalty. The Assistant Commissioner confirmed the demand but did not impose any penalty; the Commissioner (Appeals) set aside the demand; hence this appeal. 2. Heard both sides: The issue for determination is whether the value of "deemed exports" has to be included in the calculation of aggregate value of clearances for the benefit of exemption in terms of SSI Notification No.1/93. This issue stands decided in favour of the assessees by the Tribunal's order in Oxide (India) Pvt. Ltd., Vs Commissioner of Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same under that particular provision of law. Admittedly, Deemed Exports are not clearances for home consumption. They have not been specifically included, as is the case of exports to Nepal and Bhutan for the purposes of computation of clearances under the said Notification. As such, non-mention of the same in the Notification goes in favour of the assessee rather than in favour of the Revenue. As such, we conclude that the value of the Deemed Exports was not required to be added while computing the value of the clearances under the said Notification. With these observations, we set aside the impugned Order and allow the appeal with consequential reliefs to the appellants." 3. Following the ratio of the above decision, which has not even been challenged in the Revenue's appeal, we uphold the impugned order and reject the appeal. (Pronounced in open court on) Chittaranjan Satapathy, Member (T) Jyoti Balasundaram, Vice President Ksr 17-05-2010 Per Dr. Chittaranjan Satapathy 4. The respondents M/s. Bansal Metallic Oxides manufacture zinc oxide falling under sub-heading 2817.10 of the Central Excise Tariff. They reported a turnover of Rs.2,73, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exported. It was only the learned consultant appearing in the case of Oxide (India) Pvt. Ltd. (supra) who claimed deemed export to be clearly exports. The contention that deemed exports are exports is clearly untenable as the Central Excise law refers to export' only in the context of export to-outside India, and deemed exports do not leave the country. Since clearances for home consumption include all clearances within the country including deemed exports, there was no legal necessity to specifically provide for inclusion of the same in computing the clearances for home consumption, whereas clearances to Nepal and Bhutan were clearances outside India, and hence were export clearances, and therefore, there was a need for specific inclusion of the same. The decision of the Kolkata Bench of the Tribunal is not good law because it equates deemed exports with exports which has been specifically disapproved by the decision of the Hon'ble Madras High Court in the case of BAPL Industries Ltd. Vs. Union of India - 2007 (211) ELT 23 (Mad.). In the said decision, the Hon'ble Madras High Court has specifically held that, "In order to distinguish deemed export from the export, a separate c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n recorded in detail in the miscellaneous order. However, it would be appropriate to recapitulate the facts, in brief, which are relevant for considering the issues referred. The relevant facts are as follows:- (i) The respondents are manufacturers of Zinc Oxide, an item specified for exemption under Notification 1/93-CE, dated 28.02.1993. The respondents declared a turnover of Rs.2.73 crores for the financial year 1994-95 and availed the benefit of the notification for the year 1995-96. (ii) In pursuance of letter dated 07.06.1995 issued by the jurisdictional Superintendent, pointing out that clearances valued at Rs.32,83,894/- cleared to M/s. MRF Ltd., were not eligible for the benefit of Notification No.49/94-CE(NT), dated 22.09.1994 on the ground that they have not followed Chapter X procedure, they paid the duty involved. (iii) The department was of the view that the above clearances valued at Rs.32,83,894/- made to M/s. MRF Ltd., should also be included in the value of clearances for the financial year 1994-95 and that consequently the respondents exceeded the eligibility limit of Rs.3 crores during the year 1994-95 and consequently they were not eligible for the benefi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iability to pay duty on such clearances. Therefore, the said clearances are clearances made for "home consumption" on payment of duty. Such clearances cannot be treated as "deemed exports". (b) The concept of "deemed exports" is for certain limited purposes under the EXIM Policy. During the relevant period the term "deemed exports referred to those "transactions in which the goods supplied do not leave the country and the payment for such supplies is received either in Indian rupees or in free foreign exchange" (para 8.1 of Chapter 8 of the EXIM Policy). The benefits available for such "deemed exports" have been specifically listed in paras 8.3, 8.4.1 to 8.4.7, 8.5 and 8.6.1 and 8.6.2 to the said Chapter. In other words, "deemed exports" are eligible only for benefits which are specifically mentioned in the said Chapters. The "deemed exports" cannot be equated as "physical exports" for all purposes and given other benefits which may be available to physical exports. (c) Notification No.1/93-CE granted exemption to clearances made for "home consumption" and the same was subject to eligibility limit relating to "clearances for domestic consumption" during the previous financial y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Tejus Proprietary Concern of Tejus Rohitkumar Kapadia Vs Union of India Ors. and submits that Benches of a Tribunal must conform to a discipline which the Doctrine of Precedence exacts. (b) The supplies were made to M/s. MRF Ltd., during the year 1994-95 who were holding advance/intermediate licences and, therefore, in terms of definition of "deemed exports" under Chapter 8 of the EXIM Policy applicable during the relevant period, such supply should be treated as "deemed exports". Even though duty was paid subsequently on such clearances and no refund was claimed by the respondents, still the respondents can raise this issue for the limited purpose of challenging the demand raised after denying the exemption under Notification No.1/93 by holding such clearances were for "home consumption". In this regard, he relies on the decision of the Tribunal in the case of Decora Ceramics Pvt. Ltd. Vs Collector of Central Excise, Rajkot reported in 1998 (100) E.L.T. 297 (Tribunal) wherein it has been held that it was the function and duty of a statutory authority to determine the amount short levied and that when assessment was sought to be re-opened, they could also agitate any iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have carefully considered the submissions from both sides on the point of difference arising out of the order proposed by the Hon'ble Vice-President and that of the Hon'ble Technical Member. 18.1 The basic dispute is whether the respondents have exceeded the limit of Rs.3 crores in terms of value of clearances for the year 1994-95 and consequently become ineligible for benefit of exemption for the year 95-96 under the Notification No.1/93. In that context, the status of clearance of Rs.32,83,894/- made to M/s. MRF Ltd., requires to be examined. M/s. MRF Ltd. reportedly had valid advance/intermediate licences which enabled them to procure duty-free materials for use in the manufacture of tyres for export. The department issued a letter dated 07.06.1995 informing the respondents that they were not eligible for availing the benefit of Notification No.49/94-CE(NT), dated 22.09.1994 as they have not followed the Chapter X procedure. Undisputedly, the respondents paid the duty involved on the said clearances without any protest. The department, thereafter, has included the said clearances valued at Rs.32,83,894/- and held that the aggregate clearances for the year 1994-95 has exceeded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion in the Official Gazette, permit export of specified excisable goods in bond, without payment of duty from a factory of manufacture or warehouse, to Nepal or Bhutan, subject to such conditions or limitations as regards the class of goods, destination, mode of transport and other matters as may be specified therein. Explanation I: In this rule, the expression "manufacture" includes the process of blending of any goods or making alterations or any other operations thereon. Explanation II: In this rule, the term 'materials' shall include raw materials, consumables, components, semi-finished goods, assemblies, sub-assemblies, intermediate goods, accessories, parts and packaging materials used in the manufacture of export goods but does not include capital goods used in the factory in or in relation to manufacture of export goods." Notification No.49/94-CE(NT) has been issued by the Central Government prescribing conditions under which a manufacturer can avail the benefit of duty-free procurement of raw materials and one of the conditions is that they are required to follow Chapter X procedure of the erstwhile Central Excise Rules, 1944. Hon'ble Supreme Court in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ists out the categories of supplies which should be regarded as "deemed exports". Further, paragraphs 8.3, 8.4.1 to 8.4.7, 8.5 and 8.6.1 and 8.6.2 of the said Chapter specifically lists benefits available to such "deemed exports". Under these circumstances, to presume that the "deemed exports" should be treated as "export for all purposes" and benefits not specifically mentioned in the said Chapter VIII of the EXIM Policy should also be extended is not warranted. 19.2 The decisions of the Tribunal in the case of Amitex Slik Mills cited supra and Mudra Texturising Pvt. Ltd., cited supra, which are sought to be relied upon by the assessees related to benefit of DTA entitlement based on the exports made by them. In that context, in pursuance of the policy contained in EXIM Policy, DGFT authorities took into account both "physical exports" and "deemed exports" and permitted specified percentage of such clearances to be cleared to DTA on payment of applicable duties. The decisions of the Tribunal in the cited cases stand upheld by the Hon'ble Supreme Court. However, these decisions are in respect of benefits specifically made available to such "deemed exports" under EXIM Policy and no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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