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 ..... its. As the instructions contained in 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he purpose of calculation of Special Additional Duty under section 3A Of CTA, 1975 = Rs. 100/- +Rs. 38.5/-+ Rs. 22.160/- = Rs. 160.660/- Special Additional Duty = 4% of 160.660/- = 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 18 th 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wording "each" used in the Notification No.97/91-CE and No.101/93-CE is significant for the purposes of calculating/collecting the various duties of customs duty (CV duty). In short, the effective or the collectable basic customs duty/auxiliary duty is first to be determined in terms of the above Notifications. The collectable 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /98-CE, dated 2.6.98, so as to substitute the references in the said notifications to "the duties of customs leviable under section 12 of the Customs Act, 1962" with "the duties of customs leviable under the Customs Act, 1962 or under any other law for the time being in force". 2. The goods cleared by Export Oriented Undertakings (EOUs) and Free Trade Zones in the Domestic Tariff Area (DTA), are treated at par with 'imported' goods, and the excise duty leviable on such clearances, in terms of the proviso to section 3(1) of the Central Excise Act shall be an amount equal to the aggregate of all the customs duties which would be leviable under section 12 of the Customs Act, 1962 on like goods produced or manufactured, outside India, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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