TMI Blog2014 (7) TMI 1074X X X X Extracts X X X X X X X X Extracts X X X X ..... g transfer of goods from one 100% EOU to another 100% EOU as imports, are serving altogether a different purpose and will not make the goods manufactured in India as imported goods. - Decided against the revenue. Requantification of differential duty - Held that:- Revenue is right in agitating that though value of the raw material used in the manufacture of ‘Rejects’ has been taken for requantification of duty on rejects but such a requantification does not represent duty demand on the raw materials. The appeal of the Revenue to the extent of requantification allowed - matter remanded back - Decided partly in favor of revenue. - Appeal No.E/3176/2004-DB, E/3884/2005-DB - Order No. A/11417-11418/2014 - Dated:- 23-7-2014 - MR. M.V. RAVI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt is eligible to the benefit of Notification No.8/97-CE since indigenous raw materials were used in the manufacture of finished goods which were cleared as Rejects in DTA clearance. It was held by the first appellate authority that AC/DC should recalculate the duty in terms of the provisions of main Section 3(1) of the Central Excise Act, 1944. Penalty of ₹ 5 lakh imposed upon the respondent was also reduced to ₹ 50,000/-. 2. Aggrieved by the OIA dt.20.7.2004 Revenue filed appeal No.E/3176/04 on the grounds that clearances from 100% EOU are not covered by Proviso to Section 3 (1) of the Central Excise Act, 1944 for payment of duty as receipt of goods under CT-3 certificate from one 100% EOU to another 100% EOU is considere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .8.2005 Revenue filed appeal No.E/3884/05 on the following grounds:- i) The contention of the Commissioner (Appeals); that show cause notice No.V(Ch.54)3-44/DEM/2003 dt.8.5.2003 contains no proposal to demand duty on the raw material consumed in the manufacture of rejected polyester texturised yarn and the Order-in-Original No.87/ ADJ/ADC-SKA/DEM/2003, dt.27.2.2004 does not discuss such scenario, is not correct. That the show cause notice dt.8.5.2003 was issued to the unit by the Commissioner of Central Excise Customs Surat demanding duty amounting to ₹ 39,06,725/-. The basis to arrive at the amount of ₹ 39,06,725/- has not been explained in the show cause notice. The only ground given in the show cause notice is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and in its place value of the raw material used in the production of rejected texturised yarn is being taken. Non-narration to this effect gives a false impression that duty demanded in the show cause notice is with respect to the raw material used in the manufacture of goods cleared as rejects and not on the finished goods. That in the show cause notice there is no averment to the effect that duty being demanded is that applicable on the raw material used in manufacture of the rejects and that the only inference could be drawn is that value of raw material has been taken as value of finished goods also as the value of finished goods cannot be less than that of raw materials. ii) That the order of the Commissioner (Appeals) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be allowed. 6. None appeared on behalf of the respondent. Shri Willingdon C. (Advocate) of the appellant vide letter dt.15.07.2014 submitted that both the appeals may be decided on merits on the basis of synopsis already filed on 21.8.2012. In the written submissions respondent has made the following arguments:- (i) That in view of the following case-laws it is now well settled that respondent has correctly discharged duty liability under Notification No.8/97-CE:- (a) Virlon Textile Mills Ltd Vs CCE [2007 (79) RLT 783 (SC)] (b) CCE Vs Amitex Silk Mills Pvt. Ltd. [2007 (83) RLT 392 (CESTAT)] (c) Order dt.9.7.2008 of Apex Court in the case of CCE Vs Amitex Mills Pvt.Ltd. (ii) That duty of ₹ 16, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial duty is concerned, it is observed that a duty of ₹ 39,06,725/- was demanded with respect to DTA clearance of rejects as per Annexure to show cause notice dt.8.5.2003. As per the Annexure to SCN duty was also demanded @ 70.79% of the value of raw materials used in the manufacture of rejects. This quantum of duty and methodology was never questioned by the respondent. Therefore, Revenue is right in agitating that though value of the raw material used in the manufacture of Rejects has been taken for requantification of duty on rejects but such a requantification does not represent duty demand on the raw materials. The appeal of the Revenue to the extent of requantification done by Deputy Commissioner under letter F.No.V(Ch.54) 3-44 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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