9911796707
TMI BlogMethod of Calculation of Duty Leviable in Terms of Central Excise Notification No.2/95-CE, Dated 4-1-95 on Goods Cleared into Domestic Tariff Area by EOU/EPZ/ETP/STP Units under Para 9.9(b) of the Exim Policy - RegX X X X Extracts X X X X X X X X Extracts X X X X ..... n the two Circulars referred to above were not in harmony with each other, a doubt has been raised as to the correct method of calculation of duty for such DTA clearances of EOUs/EPZ units. 2. The matter has been carefully examined by the Board. As per the proviso to section 3(1) of the Central Excise Act, 1944, excisable goods produced or manufactured by EOUs/ EPZ units and brought to any other place in India, are leviable to duties of excise in an amount equal to the aggregate of the duties of Customs which would be leviable under section 12 of the Customs Act, 1962 or any other law for the time being in force on like goods produced or manufactured outside India, if imported into India. However, under notification No. 2/95-CE, dated 4-1-1995, the goods manufactured or produced by EOUs/EPZ units and cleared into DTA in accordance with certain specified paragraphs of the Exim Policy are charged to excise duty at a concessional rate which is equal to 50% of each of the duties of customs. Such being the case, each of the duty leviable on import of like goods should be worked out first and thereafter, 50% of the amount of each duty so calculated, taken together should be collected as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .660/- = Rs. 6.426/- Total duty payable = Rs. 35.0+ 3.5 + 22.160+ 6.426/- = Rs. 67.086/- Duty required to be paid = 50% of 67.086 = Rs. 33.543/- (Read with notification No. 2/95-CE, dated 4-1-1995 as amended) The amount of duty so calculated above to be payable by the EOUs/EPZ/STP/EHTP units would be subject to the condition that such duty shall not be less than the duty of excise leviable on the like goods produced or manufactured by units in DTA. F.NO.512/91/93-CUS VI DATED 18th MAY 1994 Sub: Regarding clearance of excisable goods from 100% Export Oriented Units/Units in the Export Processing Zones. Certain doubts have been expressed regarding the matter of calculation of the amount of excise duty payable on clearances of excisable goods manufactured by a 100% EOU/EPZ unit into Domestic Tariff Area in terms of Notification No.97/91-Central Excise dated 7-10-91 (since rescinded and Notification No.101/93-Central Excise, dated 27-12-93. In terms of section 3 of the Central Excise and Salt Act, 1944, excisable goods produced or manufactured in a 100% EOU/EPZ unit are liable to such excise duty in an amount equal to the aggregate of duties of customs which would be levia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able basic duty/auxiliary duty in terms of the said exemption notifications would be the 50% of such basic duties/auxiliary duties normally leviable. For computing the value for the purposes of determining the additional customs duty under Section 3 of the Customs Tariff Act, 1975, the effective chargeable basic duty/auxiliary duty is to be added to the value of the goods imported in terms of Section 14 of the Customs Act, 1962. In this type of cases (or DTA clearances) since the effective basic customs duty or the auxiliary duty is 50% of the normal effective duties, it is only the concessional 50% basic duty or auxiliary duty that would form the add up component for the purpose of determining the value for levy of additional customs duty. Hence, while computing the value in terms of notifications 97/91-CE or 101/93-CE should be taken into account. The method of calculation has been clarified in the example given in the Annexure. It is felt by the Board that the Method - A is the correct method of calculating the amount of excise duty in respect of clearance in the DTA. ANNEXURE Manner of calculation of Excise Duty on Clearance effected by EOU/EPZ units in the Domestic Tariff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia, if imported into India. Under notification Nos.2/95-CE, dated 4-1-95, 20/97-CE, dated 11-4-97 and 13/98-CE, dated 2-6-98, concessional excise duties equal to 50%, 50% and 30% of the aggregate of such customs duties respectively, have been prescribed in respect of the DTA clearances of the goods specified under the respective notifications. 3. In the case of M/s Hyderabad Industries Ltd. [1999(108) ELT 321], the Hon'ble Supreme Court has held that the charging section for the additional duty of customs, leviable under section 3(1) of the Customs Tariff Act, 1975, is not section 12 of the Customs Act. In view of the said judgment, duties of customs such as the said additional duty, cannot be considered to be levied under the said section 12 of the Customs Act. Since the notifications above referred to the duties of customs leivable under section 12 of the Customs Act, 1962 for computation of the excise duty payable on the DTA clearances, such other duties of customs other than the basic customs duty, will not be includible in such computation, consequent to the said Supreme Court judgment. 4. Notification No.38/99-CE, dated 16-9-99, has been issued to suitably amend each of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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