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2015 (4) TMI 733 - CESTAT NEW DELHI

2015 (4) TMI 733 - CESTAT NEW DELHI - 2015 (328) E.L.T. 620 (Tri. - Del.) - 100% EOU - Exemption from Basic Customs Duty under Notification No. 21/02-CUS (Sl. No. 200) - Steel scrap cleared into DTA - whether the duty on the DTA clearances is paid at the concessional rate under Notification No. 23/03-CE or the duty is paid without availing of this exemption on the full rate prescribed under proviso to Section 3 (1), the Basic Customs Duty would have to be calculated at the rate applicable to the .....

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fication, while calculating the Central Excise Duty leviable on the DTA clearances of those goods, the Basic Customs Duty would have to be taken as nil, even if those DTA clearances are not in accordance with the conditions prescribed in para 6.8 of the Foreign Trade Policy. It is seen that same view has been taken by the Board in its Circular No. 305/83/94-FTT dated 15/09/1994. - the nature of the scrap cannot be determined on the basis as to whether it has been sold the actual users or the dea .....

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e same has to be set aside.

As regards the exemption from the portion of the Central Excise Duty equivalent to the Special Additional Customs Duty (SAD) payable under Section 3 (5) of the Customs Tariff Act, the Department s contention is that the SAD would be payable as the clearances are not in terms of para 6.8 (a) of the Foreign Trade Policy and as such the exemption in terms of Sl. No. 1 of the table annexed to exemption Notification No. 23/03-CE would not be applicable. - Since .....

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rdingly, cannot be denied in respect of DTA clearances of a 100% EOU if the condition as applicable mutatis mutandis to DTA sales are satisfied. The duty demand based on this issue is also not sustainable. - Decided in favour of assessee. - Excise Appeal Nos. 3423-3424 of 2012 - Final Order No. 51029-51030/2015 - Dated:- 18-3-2015 - Hon ble Shri Rakesh Kumar, Member (Technical) And Hon ble Shri S.K. Mohanty, Member (Judicial),JJ. For the Appellant : Shri B.L. Narasimhan, Advocate For the Respond .....

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period of dispute in this case is from 01/3/08 to 31/7/10 and 01/8/10 to 31/3/11. There is no dispute that during this period, the scrap was cleared into DTA and the appellant company were paying full duty under proviso to Section 3(1) of Central Excise Act, 1944 without availing the concessional rate of duty under Notification No. 23/03-CE. The duty being paid by the appellant on the DTA clearances was the Basic Customs Duty at nil rate under exemption Notification No. 21/02-CUS (Sl. No. 200) ( .....

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y standard input output norms in respect of scrap had been fixed nor the adhoc norms had been fixed by the Development Commissioner nor other conditions of para 6.8 (e) relating to clearance of waste and scrap by a 100% EOU into DTA have been satisfied, the nil rate of basic customs duty under Notification No. 21/02-Cus would not be available. The Department is also of the view that the scrap cleared into DTA is not melting scrap as the same has been sold to dealers not to actual users, while No .....

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f the duties of customs i.e. 1st time at 2% + 1% on Additional Customs duty charged on CIF value plus basic customs duty, 2nd time at the rate of 2% + 1% on aggregate of basic customs duty plus Additional Customs duty and 3rd time at the rate of 2% + 1% on the aggregate of duties of customs + 3% of the aggregate. 1.2.3 The third point of dispute is regarding exemption to Special Additional Customs Duty (SAD). There is no dispute that the appellant in respect of their DTA sales have paid Value Ad .....

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able to the DTA clearances which are not in accordance with the provision of para 6.8 (a) of the Foreign Trade Policy i.e. the DTA clearances in excess of the ceiling of 50% of the FOB value of exports. 1.3 It is on this basis that after issue of show cause notice, the Commissioner by the impugned order-in-original dated 31/8/12 confirmed total duty demand of ₹ 2,56,12,927/- against the appellant alongwith interest thereon under Section 11AB and beside this, imposed penalty of equal amount .....

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ss and S&H cess is concerned, the same stands decided in the appellant s favour by Larger Bench judgment of the Tribunal in the case of Kumar Arch Tech Pvt. Ltd. vs. CCE, Jaipur II reported in 2013 (290) E.L.T. 372 (Tri. LB), that as regards the question of Basic Customs Duty exemption in respect of scrap under Notification No. 21/02-CUS (Sl. No. 200), in terms of this exemption notification, the melting scrap is fully and unconditionally exempt from duty, that this exemption from Basic Cust .....

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on notification, if any, applicable in respect of the same and such exemption notifications would be applicable irrespective of whether the clearances have been made in accordance with para 6.8 of the Foreign Trade Policy or otherwise, that in respect of the clearances of waste and scrap into DTA, the conditions specified in para 6.8 (e) of the Foreign Trade Policy are relevant only when the exemption under Notification No. 23/03-CE is availed, that in any case, the appellant had applied to the .....

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of the Department is totally incorrect as, the Iron and Steel scrap is used only for melting purposes and nature of the scrap is not determined on the basis of the persons to whom it is sold, that as regards the SAD exemption, Notification No. 102/07-CUS dated 14/9/07 exempts the goods imported into India from SAD if the Sales Tax or Value Added Tax is leviable on the same and since in this case the goods sold by the appellant into DTA were chargeable to Value Added Tax and VAT has been paid, th .....

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) of the Foreign Trade Policy, and that in view of the above submissions, the impugned order is not sustainable. 4. M.S. Negi, the learned DR, defended the impugned order by reiterating the findings of the Commissioner in the impugned order. 5. We have considered the submissions from both the sides and perused the records. 6. As regards the dispute regarding the calculation of education cess and S&H cess, we find that this issue stands settled in favour of the appellant by the Larger Bench j .....

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appellant, the duty is payable in terms of proviso to Section 3 (1) of Central Excise Act, 1944 and the quantum of this duty payable would be the Basic Customs Duty plus Additional Customs Duty plus Special Additional Customs Duty (SAD) plus education cess & S&H cess. Notification No. 23/03-CE prescribes the concessional rate of duty in respect of DTA clearances subject to the conditions specified in para 6.8 of the Foreign Trade Policy. Irrespective of whether the duty on the DTA clear .....

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would have to be adopted and the basic Customs duty component of the excise duty payable on the DTA clearances would be nil. Thus if some goods imported into India are fully and unconditionally exempt from Basic Customs Duty by some exemption notification, while calculating the Central Excise Duty leviable on the DTA clearances of those goods, the Basic Customs Duty would have to be taken as nil, even if those DTA clearances are not in accordance with the conditions prescribed in para 6.8 of the .....

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