TMI Blog2015 (11) TMI 448X X X X Extracts X X X X X X X X Extracts X X X X ..... h produced the copies of invoices and other deails including the copy of the letter received from the jurisdictional authorities of his customers to his jurisdictional AC/DC and it is only in this situation, the responsibility of the appellant would have been over and the assessment of the goods would be in order. Since the appellant has cleared the goods without following any of the above procedure, the benefit of above mentioned notification cannot be extended. - Decided against the appellant. The appellant did not produce the end use certificate in time and the Revenue proceeded to recover the differential duty. The appellant thereafter produced the end use certificate and it is in these circumstances, the Hon'ble Supreme Court has taken the view. In the present case, the situation is entirely different. The appellant have not cleared the goods as per the conditions of the notification. No bond was executed. Invalidation certificate, EPCG import licence, etc. were not produced at the time of clearances of the goods to the jurisdictional authorities and after the issuance of the show-cause notice at this stage, the EODC certificate is being produced and now none of the condit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he benefit of the said notification. However, the Commissioner has denied due to non-submission of evidence. We consider it appropriate to remand the matter back to the Commissioner for re-examining the same and the appellant will submit permissions given by the Development Commissioner including the ones produced before us within one month from the date of receipt of this order. The appellant may be informed of any further details required, so that they can produce the same in support of their claim. The Commissioner may examine and thereafter decide the eligibility or otherwise. Another issue raised in the impugned order is the denial of benefit of Notification No.52/2003-Cus (earlier NO.53/97-Cus) for imported inputs and Notification No.22/2003-CE dated 31/03/2003 (earlier No.1/95 dated 01/04/95). The said notifications are relating to exemptions on inputs imported or procured locally for the purpose of manufacture. - This dispute is already decided by us in this order and appellant is required to pay additional duty. Under the said circumstances, we do not find any substance for denying the benefit of said notifications and demanding duty on the inputs. Matter remanded b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the clearance of the goods by the appellant. Some of the conditions in the said notifications are in the nature of pre-clearance condition and others post clearance. Since the EPCG licence holders did not submit themselves to the department before the clearance of the goods, pre-clearance procedure was not followed by EPCG licence holders and the post importation conditions could not be monitored by the department. Revenue's case is that under these circumstances, it was incorrect on the part of the appellant to clear the goods at concessional rate of duty to the EPCG licence holders and therefore, Revenue has issued the demand notice for the differential duty of excise from the appellant. In addition to the above, demands have also been issued for the Customs duty involved on the inputs used in the manufacture of goods so cleared as also the excise duty involved in respect of the inputs locally procured. Notices also proposed interest and penalties under various provisions of law. Case was adjudicated by the Commissioner, who has confirmed demand in the impugned order. This is second round of litigation. Aggrieved by the said order, appellant is before us. 3. The learned S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nto by this Tribunal. The Hon'ble Supreme Court in State of AP v. Hyderabad Asbestos Cement Production Ltd. 1994 (94) STC 410 was quoted to support the point. 3.5 It was further submitted by the learned senior Counsel that it is not that non-compliance of every conditions of Notification No.44/02-Cus and 55/03-Cus will give raise to demand of duty. It is only the non-fulfillment of export obligation and/or failure to give installation certification that can give rise to duty demand. It was submitted that in view of the said position, breach of any condition of the notification other than export obligation cannot lead to raising of the demand by the Revenue. 3.6 The learned Senior Counsel submitted that the amount of bond , form of bond and to whom the bond has to be executed , has not yet been specified by proper officer. Requirement to execute bond will arise only thereafter. Another submission of the learned senior Counsel was that Foreign Trade Policy is piece delegated legislation by Central Government. It has specified that for indigenous procurement, LUT has to be given to DGFT. Para 2.27 of the Policy was quoted to support the contention. The said paragraph sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure of excisable goods) Rules, 2001 is another example. It was further submitted that this Tribunal decision in the case of CC v. Dynamic Twisters Pvt. Ltd. 2012 (276) ELT 396 has held that manufacturer is not liable when liability is casted upon the merchant exporter to export the goods. Similarly, this Tribunal decision in the case of Jay Formulation Ltd. v. CCE 2013 (289) ELT 395 (Tri) has held that duty liability in respect of goods cleared by manufacturer exporter against CT-3 certificate issued by merchant exporter is on the merchant exporter only, if the goods are not found exported ultimately. The learned senior Counsel quoted the Tribunal decision in the case of Maruti Udyog Ltd. v. CCE 2000 (124) ELT 1175 (Tri) wherein the assessee cleared the saloon cars on payment of concessional rate of excise duties in terms of Notification No. 162/86-CE. The concessional rate of duty was subject to the condition that the saloon cars are required for use solely as taxies and the manufacturer was required to furnish certificate from concerned State Transport Authority stating that each such saloon cars has been registered for use solely as a taxi. The revenue raised objection that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and of full customs duty raised in the Show Cause Notices, dated 04/04/2008 is incorrect and is not sustainable. 3.12 Learned Counsel further submitted that exemption from Central Excise duty otherwise available under Notification No. 30/04-CE has to be considered while calculating component of additional duties of customs under Section 3 of Customs Tariff Act, 1975, in view of the law laid down by Hon'ble Supreme Court in the case of SRF Ltd. v. CC 2015-TIOL-74-SC. 3.13 It was further submitted that a converse situation was considered by the Hon'ble Supreme Court in the case of Thermax v. CCE 1992 (61) ELT 352. In that, issue related to levy of additional duty of customs on goods imported into India. The Supreme Court held that for the purposes of computing additional duty of customs, we must forget that the goods are imported into India but assume that goods manufactured in India and that compute excise duty accordingly. This part of the decision has been affirmed by Constitution Bench in Hyderabad Industries v. UOI 1999 (108) ELT 321. 3.14 It was further submitted that there are number of errors committed in computing/demanding the differential excise duties. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bruary 2008. 3.17 It was also submitted that the department in demanding differential excise duty in the show cause notices has taken the incorrect rate of BCD. During the period March 2005 the correct rate should be 15% as against 20% adopted by the department. Similarly, during 8 January to 31 March 2004 the correct rate is 20% as against 30% adopted by the department. During the period March 2003 to 07 January 2004 the correct rate is 25% as against 30% adopted by the department. 3.18 Another submission made by the learned Counsel was extended period of limitation is not invocable. Therefore, demand of duty beyond normal period is time barred for first show cause notice dated 13.9.2006. The appellant had filed a letter dated 07/01/2003 and sought clarification from the department and the learned Assistant Commissioner vide letter dated 26/08/2003 had clarified that the appellants can clear the goods at concessional rate of duty subject to fulfillment of conditions of Notification. Thereafter, monthly ER-2 returns filed with the department every month shows the clearances made to EPCG license holder, vide Notification No. 44/2002 and 55/03-Cus, the rate of duty adopted bein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay High Court in Commissioner of Customs v. National Leather Cloth Manufacturing 2015-TIOL-342-HC-MUM was quoted. Reliance was also placed upon the case of CC v. Raja Impex (P.) Ltd. 2008 (229) ELT 185 (P H). As also, the larger Bench decision in the case of Shiv Kripa Ispat Pvt Ltd. v. Commissioner of C.EX Cus., Nasik, 2009 (235) ELT 623 (Tri.-LB). Similar view has been taken by the Bombay High Court in Finesse Creation Inc. 2009 (248) ELT 122, which was affirmed by Hon'ble Supreme Court. 3.20 The learned Senior Counsel further submits that goods are not liable for confiscation under Section 111(o) of the Customs Act and consequently no penalty under Section 112 is imposable under Customs Act, qua demand of duty on imported inputs. It was further submitted that B-17 bond is not a substitute for invocation of Section 11A of the Central Excise Act. In any case, B-17 bond does not cover clearances of goods into DTA of the present nature. This Tribunal decision in the case of CCE v. Emcure Pharmaceuticals Ltd. 2014 (307) ELT 180 (Tri-Mum) was quoted to support the said contention. 3.21 Senior Counsel submitted that in view of the above submission, the whole demand of excis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Jindal Praxair Oxygen Co. Ltd. 2014 (301) ELT49 ( Ker) (g) Kalpik Interiors v. CST, Delhi - 2014 (36) STR 1283 (T) and in such cases extended period of limitation is applicable. 4.1 Learned Commissioner (AR) further submitted that the person who clears goods under exemption has to fulfill, the conditions and cannot rely on another person fulfilling the condition on his behalf. The person who removes goods manufactured by him has to prove that the conditions of exemption are fulfilled. Learned AR further submitted that even if the person is able to prove that the goods have been used for the specified purpose or that the purpose of the Notification can be demonstrated to have been achieved, yet, the concessional rate of duty under exemption notification or benefit of any scheme under any Rule would not be available if the conditions required to be complied with under the scheme of the notification or Rule are not complied with as mandated and at the point in time when mandated. In support of his contention, the learned AR submitted the following case laws: (a) Vinay Solvent Extraction Industries 2005 (183) ELT 113 (SC) (b) Indian Oil Corporation Ltd. 2012 (276 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and fulfill all continuing obligation is possible benefit of notification cannot be extended. Learned Commissioner (AR) further submitted that ER 2 returns are self assessed returns and the very fact that the appellant has self assessed to duty under Notification No.44/2002-Cus and 55/2003-Cus without meeting the conditions prescribed in therein with respect to the execution of bond and guarantee by the consignee, this itself would disentitle the appellant to clear the goods with the benefit of the said notification and in this situation, the duty is required to be demanded by the appellant and appellant alone. It was further submitted that under the Foreign Trade (Development and Regulation) Act, 1992, Foreign Trade Policy read with the provisions of the Customs Act, 1962, the provisions of both statutes need to be met. Any clearance under EPCG Notification needs to meet all the conditions thereof including Bond. It was further submitted that the legal undertaking under HBP and Foreign Trade Policy clearly mandates at para (v) and (xi) thereof. Further, the Customs authorities are the final authority for satisfaction of conditions to be met in a Customs Notification and demand is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 (61) ELT 4 (SC), Western India Plywood 1989 (44) ELT 595 (SC) were quoted. To support his contention, the decision in the case of Hani Era Textiles 2014 (312) ELT 324 (T) was also quoted. 4.6 It was also submitted that explanation to Section 3(1) of Customs Tariff Act is not similar to the explanation given in Section 3 (1) of the CEA. It was further submitted that the decision of the Hon'ble Supreme Court in the case of Thermax Pvt Ltd. 1992 (61) ELT 352 is not applicable and it is based on a concession by Department that the articles were not covered by any other entry. It was further submitted that only the explanation in the Central Excise Act, 1944 is relevant in this case, it shall override the provisions of the explanation in the Customs Tariff Act even for arriving at the rate of additional duty of Customs component of BED. 4.7 The learned AR further submitted the decision of the Hon'ble Supreme Court in the case of SRF Ltd. 2015 (318) ELT 607 (Division Bench) is sub silentio on the issue and is not binding. Learned AR further submitted the ratio of the decision in the case of Ashok Traders 1987 (32) ELT 262 (Bom) is described as a not good law, even though ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prejudice to other arguments, the relaxation of the said paragraphs 3 and 6, if available, could only be available in case the appropriate duty on goods cleared in DTA was paid either within 3 months of procurement of duty free material or within 1 year of the procurement of duty free material as per Condition 4(a)(ii) (iii) of opening paragraph of Notification No.22/2003-CE and Condition 3(d)(I)(ii) (iii) of Notification No.52/2003-Cus. The conditions and limitations imposed by Notification No.44/2002-Cus and 55/2003 for such clearances have not been met. It was further submitted that the benefit of Notification No.23/2003-CE is not available to the impugned clearances because the conditions of the said Notification are not satisfied as recorded at paragraphs 31 32 of the Order-in-Original. 4.11 It was also submitted that appellant has been accorded the concessions of procurement of duty free indigenous and imported materials, facilities of a warehouse under the Customs Act, 1962 and the Central Excise Rules, 2002, the manufacture in bond and removal of such materials and goods produced or manufactured therefrom, on the execution of Bonds with security/surety. The demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the language of the Notification No. 30/2004-CE is entirely different and that has been construed by the Supreme Court to be not applicable for imported goods. In Ashok Traders v. UOI-1987 (32) ELT 262 (Bom.), the issue was availability of exemption from CV duty under Notification No. 302/79-CE dated 4.12.1979 on import of High Density Polyethylene. This exemption was subject to the condition that appropriate amount of excise duty is paid on raw naphtha used for the manufacture of High Density Polyethylene. In other words, this condition of the notification was not similar to the condition of Notification No. 30/2004-CE. 5.3 Learned Senior Counsel also submitted that in Priyesh Chemicals Metals v. Collr- 2000 (120) ELT 259 (Tri-LB), the issue was relating to availability of the Notification No. 19/88-CE. in respect of import of Zinc Ash into India and the condition was more or less similar to the condition mentioned in Notification No.30/2004. It was further submitted that reasoning of the Larger Bench of the Tribunal in Priyesh Chemicals and cither decisions following the same have now been reversed by the Supreme Court. The learned Counsel further submitted that the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such sum and with such surety or security as may be specified by the Assistant Commissioner of Customs or Deputy Commissioner of Customs binding himself to fulfil export obligation equivalent to five times the CIF value of the goods imported on FOB basis, as specified in the licence, or for such higher sum as may be fixed by the Licensing Authority, within a period of eight years from the date of issue of licence, in the following proportions, namely :- Sl. No. Period from the date of issue of licence Proportion of total on export obligation (1) (2) (3) 1. Block of 1st and 2nd year Nil 2. Block of 3rd and 4th year 15% 3. Block of 5th and 6th year 35% 4. Block of 7th and 8th year 50%: Provided that where the CIF value of licence is not less than ₹ 100 crores, the export obligation shall be fulfilled within a period of 12 years from the date of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cturer(s) or vendor(s), (ii) import of irrigation equipment for use in contract farming for export of agricultural products, and (iii) importer rendering services. the capital goods may be installed at the factory or premises of such other person whose name and address are endorsed on the licence referred to in condition (i) and where the bond for full difference of duty, if necessary, in terms of condition (2), with a bank guarantee is executed by the importer and such other person binding themselves jointly and severally to fulfill the export obligation and all other conditions of this notification and to pay duty with interest in case of default; (5) notwithstanding anything contained in condition (3), where the Licensing Authority grants an extension of block-wise period for any block(s) or overall period of fulfillment of export obligation up to a period of two years or regularization of shortfall in export obligation, not exceeding five percent of such export obligation, the said block-wise period or overall period of export obligation may be extended and the said shortfall in export obligation be condoned by the Assistant Commissioner of Customs or Deputy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (4) export obligation , - (i) in relation to importers other than those rendering services, means export, to a place outside India, of products manufactured with the use of capital goods imported, assembled or manufactured in terms of this notification : Provided that export obligation may also be fulfilled by (a) export of same product capable of being manufactured with the use of said capital goods; or (b) export of same product manufactured in different units of the licence holder; or (c) through third party exports made by an exporter or manufacturer on behalf of the licence holder by exporting the same product and in such cases, inter alia the Shipping bills shall indicate name of both the third party and the licence holder; or (d) making supplies of same product in terms of\sub paras (a) (b) (d) (e) (f) (g) (h) (i) and (j) of paragraph 8.2 of the Export and Import Policy; (ii) in relation to importers rendering services, means, receiving payments in freely convertible foreign currency for services rendered through the use of such capital goods. [Notification No. 44/2002-Cus., dated 19-4-2002] 6.2 Perusal of the said notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vides for monitoring of the block-wise export obligation. The importer is expected to produce the details of the export carried out in each block year within thirty days of the completion of the block year and the AC/DC is expected to examine the same and if the export obligation of a particular block is not fulfilled the importer is expected to pay customs duty of an amount equal to that proportion of duties leviable on the goods but for the exemption. Thus, if an importer who is expected to fulfil 15% of the total export obligation in 3rd and 4th year does not fulfil the same but is able to export only 10% of the total export obligation in the first four years, it is expected that importer will pay 5% of the total duty leviable on the goods but for the exemption along with interest @ 24% per annum to the Customs department. (iv) The condition (iv) in the notification is that the capital goods imported should be installed in the importers factory or premises and a certificate to that effect from the jurisdictional AC/DC of Central Excise or an independent Chartered Engineer is required to be produced confirming installation and use of capital goods in the importer's factory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulfil export obligation using such capital goods and not otherwise. If an importer fulfils export obligation without use of goods imported under the said exemption notification then such goods will not be entitled to the benefit of the exemption notification No.44/2002-Cus or 55/2003-Cus. It is the duty of the AC/DC to verify that the goods cleared under the said notification are installed in the importers premises and also that the export obligation is fulfilled using the goods in question. 6.4 In case of goods imported from abroad, goods are assessed at the time of clearance from the customs, assessment can be self assessment or it can be assessed by the custom officer depending upon the goods or status of importer. In both the situations before the goods get cleared, the importer produces EPCG licence, which is examined by Customs officers executes the required bond, etc. and thereafter the customs authorities monitor various conditions mentioned in the notification. In case an EPCG licence holder decides to procure the goods from the local manufacturer instead of importing, the role of the assessment gets shifted to the factory of production of such goods. Thus, before clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isdictional authorities to raise the demand against such defaulters. However, it is not in dispute in the present case that the appellant has not taken any care to ensure that his customers fulfill the conditions of the notification by submitting themselves to the jurisdictional authorities along with related documents, like invalidation letter, EPCG licence, bond, along with proper sureties, etc. Since the appellant has cleared the goods without ensuring the above mentioned conditions, in our considered view, the appellants are not entitled to clear the goods with, the benefit of the said notification and liability of excise duty for such clearance and consequent assessments squarely lies on the appellant. The appellant cannot be permitted to take a stand later on that these conditions are relating to their customers; and it is for the Revenue to chase such customers and raise demands against them. In our considered view if the appellant would have ensured that his customers submit themselves to the Revenue authorities with the requisite documents and after fulfilling the conditions which are required to be fulfilled before the clearance of the goods then only appellants were enti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that a person who claims exemption or concession has to establish that he is entitled to that exemption or concession. A provision providing for an exemption, concession or exception, as the case may be, has to be construed strictly with certain exceptions depending upon the settings on which the provision has been placed in the Statute and the object and purpose to be achieved. If exemption is available on complying with certain conditions, the conditions have to be complied with. The mandatory requirements of those conditions must be obeyed or fulfilled exactly, though at times, some latitude can be shown, if there is a failure to comply with some requirements which are directory in nature, the non-compliance of which would not affect the essence or substance of the notification granting exemption.. In Novopan Indian Ltd. (supra), this Court held that a person, invoking an exception or exemption provisions, to relieve him of tax liability must establish clearly that he is covered by the said provisions and, in case of doubt or ambiguity, the benefit of it must go to the State. A Constitution Bench of this Court in Hansraj Gordhandas v. H.H. Dave [1996] 2 SCR 253, held that such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly so as to carry out the intent for which the statute was enacted and not a mirror image type of strict compliance. Substantial compliance means actual compliance in respect to' the substance essential to every reasonable objective of the statute and the court should determine whether the statute has been followed sufficiently so as to carry out the intent of the statute and accomplish the reasonable objectives for which it was passed. Fiscal statute generally seeks to preserve the need to comply strictly with regulatory requirements that are important, especially when a party seeks the benefits of an exemption clause that are important. Substantial compliance of an enactment is insisted, where mandatory and directory requirements are lumped together, for In such a case, if mandatory requirements are complied with, it will be proper to say that the enactment has been substantially complied with notwithstanding the non- compliance of directory requirements. In cases where substantial compliance has been found, there has been actual compliance with the statute, albeit procedurally faulty. The doctrine of substantial compliance seeks to preserve the need to comply strictly with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cribed was specific to Chapter X with the sole intention of maintaining separate accounts for receipt, issue and usage of duty free remitted inputs received from the supplier unit. Similarity of columns and the details furnished therein cannot be considered as substitute for not maintaining of RG-16 Register or other registers for remission of duty under Chapter X. 27. We have already indicated that, at the supplier end, no registration under Rule 174 was obtained and, no records were kept. The applicants, at the recipient end, were also legally obliged to give various declarations in the statutory forms so as to claim exemption and such declarations admittedly were not made. Non-compliance of those conditions enumerated under various rules in Chapter X of the Excise Rules and non-furnishing of various statutory forms prescribed under Chapter X, in our view, are fatal to a plea of substantial compliance land intended use. The respondents, therefore, on the facts of this case, have not succeeded in establishing the plea of intended use or the substantial compliance of the procedure set out in Chapter X so as to claim the benefit of the exemption notification dated 11 -8-199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upra) and held that a provision for exemption, concession or exception, as the case may be, has to be construed strictly and if the exemption is available only on complying certain conditions, the conditions have to be compiled with. In the aforesaid decision, the Constitution Bench further held that detailed procedures have been laid down in Chapter X of the Rules so as to curb the diversion and utilization of goods which are otherwise excisable and the plea of substantial compliance or intended use therefore has to be rejected. 6.9 In our view, both the judgements of Hon'ble Supreme Court are squarely applicable in the facts of present case. 6.10 Coming to various other contentions of the learned Senior Counsel for the appellant, the first contention of the learned senior Counsel is that at the time of denovo adjudication, they have produced certificate in respect of 50% of the invoices and thereafter now they have produced certificate in respect of 95% of the clearances. In our view production of these certificates at this distant point of time is of no consequence. For example the installation certificates, these were to be produced within, six months from the date o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in these circumstances this Tribunal has taken the view that delay in filing of end use certificate can be condoned. Similarly, in the case of Hotline Teletube and Components Ltd., (supra) the appellant had cleared certain goods on execution of the end use bond. The appellant did not produce the end use certificate in time and the Revenue proceeded to recover the differential duty. The appellant thereafter produced the end use certificate and it is in these circumstances, the Hon'ble Supreme Court has taken the view. In the present case, the situation is entirely different. The appellant have not cleared the goods as per the conditions of the notification. No bond was executed. Invalidation certificate, EPCG import licence, etc. were not produced at the time of clearances of the goods to the jurisdictional authorities and after the issuance of the show-cause notice at this stage, the EODC certificate is being produced and now none of the conditions of the notification can be monitored and checked. There can be no doubt that this Tribunal can look into the documents produced in the proceedings before us. However, as mentioned earlier the bond itself has not been executed, the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s required to assess the goods at the time of clearance and since the conditions of notification were not fulfilled, appellant was not entitled to clear the same availing the benefit of notification No.44/2002 55/2003 and under these circumstances, it is the appellant who is required to pay the duty. There can be no doubt if the appellant would have fulfilled the pre-clearance conditions and his customers would have failed in fulfilling post clearance conditions, the demands would have been raised from his customers and not from the appellant. 6.11 The learned Senior Counsel has submitted this Tribunal's decision in the case of Dynamic Twisters Pvt. Ltd., (supra), We have gone through the said judgement. In the said case, appellant's customers (who were to export the goods) has executed the bond with the Central excise authorities and in these circumstances, the Tribunal has held that duty is to be demanded from the exporters (appellant's customer) and not from the Dynamic Twisters Pvt. Ltd. Similar is the position in the case of Jay Formulation Ltd. (supra). In the present case, the appellant without ensuring that his customers executes the bond, cleared the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant has submitted that even if they are required to pay the duty as demanded in the show-cause notice, the countervailing duty portion is required to be computed at nil rate of duty in view of the Hon'ble Supreme Court's decision in the case of SRF Ltd. reported in 2015 (318) ELT 607 (SC). It was also submitted that , the Division Bench of the Supreme Court has already held that the decision of the Bombay High Court in the case of Ashok Traders v. UOI in 1987 (32) ELT 262 (Bom) is not a good law. In contrast the learned Commissioner (AR) submitted that three member Division Bench of the Hon'ble Supreme Court in the case of Garden Silk Mills Ltd., v. UOI 1999 (113) ELT 358 (SC) has held the same to be a good law. It was also submitted that three member Bench of the Hon'ble Supreme Court in the case of Motiram Tolaram v. UOI in 1999 (112) ELT 749 (SC) has taken a similar view. It was further submitted that two member Division Bench of the Hon'ble Supreme Court cannot over rule the decision of the three member Bench. The learned senior Counsel, further submitted that the Hon'ble Supreme Court in the case of SRF Ltd. (supra) has also disposed of the appeal re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the aggregate of the duties of customs which would be leviable under the Customs Act, 1962 (52 of 1962) or any other law for the time being in force, on like goods produced or manufactured outside India if imported into India, and where the said duties of customs are chargeable by reference to their value; the value of such excisable goods shall, notwithstanding anything contained in any other provision of this Act, be determined in accordance with the provisions of the Customs Act, 1962 (52 of 1962) and the Customs Tariff Act, 1975(51 of 1975). Explanation 1. - Where in respect of any such like goods, any duty of customs leviable for the time being in force is leviable at different rates, then, such duty shall, for the purposes of this proviso, be deemed to be leviable at the highest of those rates. Explanation 2. - In this proviso, - 7.2 It is seen from the proviso to said Section that in case of goods cleared by a 100% EOU to DTA the duty of excise shall be an amount equal to aggregate of the duties of Customs which would be leviable on importation of such goods. Further Explanation 1 clarifies that where in respect of any such like goods, any duty of custo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncerned. The object of Section 3 of the Customs Tariff Act, 1975 is to bring a level playing field. The said section primarily provides levy of additional duty equal to excise duty, sales tax, local taxes and other charges. This section reads as: 3.(1) Levy of additional duty equal to excise duty, sales tax, local taxes and other charges. - Any article which is imported into India shall, in addition, be liable to a duty (hereafter in this section referred to as the additional duty) equal to the excise duty for the time being leviable on a like article if produced or manufactured in India and if such excise duty on a like article is leviable at any percentage of its value, the additional duty to which the imported article shall be so liable shall be calculated at that percentage of the value of the imported article: Provided that in case of any alcoholic liquor for human consumption imported into India, the Central Government may, by notification in the Official Gazette, specify the rate of additional duty having regard to the excise duty for the time being leviable on a like alcoholic liquor produced or manufactured in different States or, if a like alcoholic liquor is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c granules are used by thousands of small industries for manufacture of household plastic goods or packaging material, etc, There may be few big units also manufacturing household plastic goods or packaging material. In such situation, government may decide to exempt such household plastic goods or packaging goods subject to the condition that no credit of inputs is availed. Manufacturers of such down stream products will have an option either to take Cenvat Credit and pay the duty on the goods manufactured by them or not to take Cenvat credit on plastic granules, dyes, colour, etc. and also not to pay the duty on the goods manufactured. As mentioned earlier, generally these options are given in order to make thousands of small units free from maintaining records and follow excise procedures. Any manufacturer who would like to pay duty and avail Cenvat credit is allowed to do so. It would thus be seen that in such cases two rates of duty comes into play for the same goods one for the manufacturers, who are availing the Cenvat Credit and another rate for the manufacturers, who are not availing the Cenvat credit. In the case of former it may be 12% while for latter NIL or concessiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the DTA, the benefit of such notification is extended. However, since the appellant is 100% EOU, in our view as per Explanation 1 after clause (ii) of proviso to Section 3 (1) of the Central Excise Act, since there are two rates, viz., 8% and NIL rate highest of the two i.e., 8% will be chargeable. In the case of 100% EOU due to their status as 100% EOU, they are eligible to import or procure locally yarns, colours and other chemicals without payment of duty while DTA units will be required to purchase duty paid inputs. The main benefit of second option is that manufacturer need not follow excise procedures and records and can be out of excise control while in first option if a manufacturer is exporting the goods, he will get refund of duty. Thus, in case of 100% EOU when the goods are being cleared, they are required to pay countervailing duty corresponding to the highest/normal rate of duty of 8% under Notification NO.29/2004-CE. 8.4 In fact even in the present case there was no dispute between the Revenue and the appellant about the fact that countervailing duty chargeable will be 8%. This was not an issue before original authority or in grounds of appeal. It is only duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant, question of fulfilling the aforesaid condition does not arise. In holding so, it followed the judgment of the Bombay High Court in the case of 'Ashok Traders v. Union of India'[1987 (32) E.L.T. 262], wherein the Bombay High Court had held that it is impossible to imagine a case where in respect of raw nephtha used in HOPE in the foreign country, Central Excise duty leviable under the Indian Law can be levied or paid. Thus, the CEGAT found that only those conditions could be satisfied which were possible of satisfaction and the condition which was not possible of satisfaction had to be treated as not satisfied. 7. We are of the opinion that the aforesaid reasoning is no longer good law after the judgment of this Court in 'Thermax Private Limited v. Collector of Customs (Bombay),New Customs House' [1992 (4) SCC 440 = 1992 (61) E.L.T. 352 (SC) which was affirmed by the Constitution Bench in the case of 'Hyderabad Industries Limited v. Union of India'[1999 (5) SCC 15 = 1999 (108) E.L.T. 321 (S.C.)]. In a recent judgment pronounced by this very Bench in the case of 'AIDEK Tourism Services Private Limited v. Commissioner of Customs, New Delhi' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to Section 3 (1) of the Customs Tariff Act:. But the issue was whether the benefit of Notification No.6/2002 will be available or not. We also note that in the case of SRF Ltd. (or ITC Ltd.) units were not 100% EOU and it was not a case of clearance of goods to DTA and determination of duty under clause (ii) of proviso to Section 3 (1) of the Central Excise Act reed with Section 3 (1) of the Customs Tariff Act and the two explanations under these sections. Thus, the implication of explanation given in: the Central Excise Act relating to clearance from 100% EOU as also Explanation under Section 3 (1) of the Customs Tariff Act were not the issue before the hon'ble Supreme Court. The issue was limited whether benefit of Notification No.6/2002 can be extended in case of imported goods. The hon'ble Supreme Court judgment is therefore sub-silentio on this issue. The hon'ble Supreme Court in the case of Municipal Corporation of Delhi v. Gurnam Kaur has observed as under: 11. Pronouncements of law, which are not part of the ratio decidendi are classed as obiter dicta and are not authoritative. With all respect to the learned Judge: who passed the order in Jamna Das' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt held itself not bound by its previous decision. Sir Wilfrid Greene, M.R., said that he could not help thinking that the point now raised had been deliberately passed sub-silentio by counsel in order that the point of substance might be decided. We went on to say that the point had to be decided by the earlier court before it could make the order which it did; nevertheless, since it was decided without argument, without reference to the crucial words of the rule, and without any citation of authority , it was not binding and would not be followed. Precedents sub-silentio and without argument are of no moment This rule has ever since been followed. One of the chief reasons for the doctrine of precedent is that a matter that has once been fully argued and decided should not be allowed to be reopened. The weight accorded to dicta varies with the type of dictum. Mere casual expressions carry no weight at all. Not every passing expression of a Judge, however eminent, can be treated as an ex cathedra statement, having the weight of authority. 13. In D.R.Venkatchalam v. Dy. Transport Commr. It was observed that courts must avoid the danger of a priori determination of the meaning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of duties are applicable then the highest of the two would be applicable. Any other interpretation will defeat the object and purpose of these parts of the legislations. It will provide imported goods advantageous position vis-a-vis similar goods manufactured by domestic area unit. Similarly, 100% EOU will be in far advantageous position vis-a-vis DTA units while clearing the goods in DTA. In fact, such units will have double advantage. The situation would be that 100% EOU, (which are eligible to get duty free inputs) will get inputs duty free and since they have got the inputs duty free there is no question of availing the credit and at the time of clearance of the manufactured goods they will not be required to pay countervailing duty component. On the other hand, DTA units will be required to pay the excise duty on the final products (in this case carpets) and avail credit of duty on inputs or alternatively not to pay the excise duty on the final products but not avail the Cenvat credit of the excise duty already paid on various inputs used in the manufacturing process. In fact similar issue had come up before this Tribunal in the case of Hanil Era Textile Ltd. 2014 (312) ELT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in two notifications. Notification No. 29/2004-C.E. prescribed duty of 4% (on cotton yarn) and 8% (on other yarns covered by specific headings) without any condition. Notification No. 30/2004-C.E., on the other hand prescribes NIL rate of duty subject to the condition that no credit of duty on inputs or capital goods has been taken under the provisions of the Cenvat Credit Rules, 2004. This condition cannot be satisfied on the goods manufactured or produced outside India and imported into India as the Central Excise Law including Cenvat Credit Rules, 2004 are inapplicable there. Thus we hold that duty rates applicable will be as per Notification No. 29/2004 C.E. or any other notification (if relevant to the goods in question) and not as per Notification No. 30/2004-C.E. Further, Explanation to Section 3(1) of the Customs Tariff Act clearly mandates that where excise duty is leviable at different rates, the highest duty is to be taken. Not only, even Explanation 1 to Section 3(1) of the Central Excise Act which is specific to 100% Export Oriented Undertaking specifically mandates that where in respect of any such like goods, any duty of Customs leviable for the time being in force ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned Senior Counsel for the appellant submitted that barring one show-cause notice dated 04/08/2008 covering period April 2007 to February 2008 in all other show-cause notices, the benefit of notification No.2/95-CE or 23/2003-CE has already been extended and even in respect of this show cause notice, for the period covered by the said notice they are satisfying all the conditions of the notification as they have achieved NFE and clearance in the DTA (including the clearances under EPCG licence) is far less than 50% of the FOB value of the export. In support of the same, the senior Counsel has also submitted data in the tabular form indicating DTA sales permission given by Development Commissioner, DTA clearances by availing Sl.No.2 of Notification NO.23/2003-CE, DTA sales entitlement remaining and value of clearances in DTA made to EPCG holders. This table indicates that value of DTA clearances (including made to EPCG licence holder) is less than the DTA sales permission given by Development Commissioner. Learned Senior Counsel also submitted letter No.SEEPZ-SEZ/28/32/97/01-02/8006 dated 08/10/2008 from Development Commissioner, SEEPZ SEZ stating that the performance of the unit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extended period of limitations have been invoked in one of the show-cause notices. In the show-cause notice reference to B-17 bond along with proviso to Section 11A is also mentioned. We find that Commissioner in her adjudication order has spoken about the B-17 bond alone. In the order portion, the demand has been confirmed in terms of B-17 bond along with provisions of Section 11A. The learned Commissioner (AR) submitted the judgment of this Tribunal in the case of Endress + Hauser Flowtec (I) Pvt. Ltd. v. CCE, Aurangabad 2009 (37) ELT 598 (Tri-Mumbai) in support of the contention that B-17 bond is good enough and on the other hand the learned Senior Counsel has submitted that the decision of this Tribunal in the case of CCE v. Emcure Pharmaceuticals Ltd. 2014 (307) ELT 180 (Tri-Mum). The learned Commissioner (AR) has also submitted a copy of B-17 bond executed by the appellant. Since the Commissioner has not given any findings relating to proviso to Section 11A even though, in the final order Section 11A is mentioned. We are of the view that the matter needs to be re-examined by; the Commissioner to give specific findings whether the proviso to Section 11A could be applicable in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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