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Brinton Carpets Asia Pvt. Ltd. Versus Commissioner of Central Excise & Service Tax, Pune

2015 (11) TMI 448 - CESTAT MUMBAI

100% EOU - DTA clearance of manufactured carpets to EPCG licence holders - export obligations - extension of time limit - procedure not followed by the appellant - Held that:- appellant is a 100% EOU and they themselves are procuring the goods under Central Excise (Removal of goods at concessional rate of duty for manufacture of excisable goods) Rules, 2001 and the said rules are general rules and can be followed whether or not prescribed a particular notification and in the present case the app .....

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.44/2002 & 55/2003. Further, the appellant should have every month 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 .....

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. 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

Regarding extension of time limit - Held that:- The appellant c .....

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tion under the law. In, this case, the appellant had cleared the goods without ensuring that his customers submit themselves to the jurisdictional authorities and fulfill pre-clearance conditions. The obligation included that their customers executes the bond with the jurisdictional authorities in terms of Notification No.44/2002 and 55/2003and also produce the EPCG licence, invalidation certificate, etc. which were required to be debited by the jurisdictional authorities after examining the val .....

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ountervailing duty when the goods are being cleared from 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 case of 100% EOU when the goods are being cleared, they are required to pay countervailing duty corresponding to the highest/normal rate o .....

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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 .....

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ellant. - APPLN. NOS. C/S/95145 OF 2013, E/S/95146 OF 2013 & E/S/95162 OF 2013 APPEAL NOS. C/86865 OF 2013, E/86866 OF 2013 & E/86879 OF 2013 - Dated:- 5-8-2015 - P.K. JAIN AND S.S. GARG, JUDICIAL MEMBER For The Appellant : V. Sridharan, Advocate For The Respondent : Hitesh Shah, Comm. (AR) ORDER Per: P.K. Jain These appeals along with stay petitions are directed against Order-in-Original No.38-40/P-III/Comr/C.Ex/2012-13 dated 30/01/2013 passed by Commissioner of Central Excise & Service Tax .....

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tion to the earlier mentioned clearances, they are also clearing the carpets in the DTA to certain customers, who themselves are the holders of Export Promotion Capital Goods (EPCG) licence. The EPCG licence permits the holders of such licence to import specified goods at concessional rate of customs duty, which in turn is linked to export of goods/services over a period of time and subject to number of conditions in the relevant Notifications, viz., Notification No.44/2002-Cus dated 19/04/2002 .....

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crux of the present case is that the appellant cleared the goods at concessional rate of duty without ensuring that their customers i.e. EPCG licence holders submit to the department for various requirements of Notification No.44/02-Cus dated 19/04/2002 and 55/03-Cus dated 31/03/2003 before 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 sub .....

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dition 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 Senior Counse .....

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rtificates and export obligation discharge certificates are available for 94% of the clearances 3.1 It was further submitted that notification No.44/2002-Cus and 55/2003-Cus duly provide for extension of time by Deputy Commissioner for producing installation certificate and evidence of fulfillment of export obligation. It was further submitted that condition (4) of Notification No. 44/02-Cus or 55/03-Cus requires the installation certificate to be produced by the EPCG Licence holder confirming t .....

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ommissioner of Customs showing the extent of export obligation fulfilled. Here again, the Assistant/Deputy Commissioner is empowered to extend the period. 3.3 It was further submitted that since the notification itself provides for extension of time delay in producing the installation certificate/proof of fulfillment of export obligation, delay in submission of these documents is of no consequence. In support of this contention, this Tribunal judgment in the case of J.K Corporation Ltd. 1996 (88 .....

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) 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 can .....

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o be given to DGFT. Para 2.27 of the Policy was quoted to support the contention. The said paragraph states that "Wherever any duty free import is allowed or where otherwise specifically stated, the importer shall execute a Legal Undertaking (LUT)/Bank Guarantee (BG)/ Bond with the Customs Authority before clearance of goods through the Customs, in the manner as may be prescribed. In case of indigenous sourcing, the licence/ certificate/ permission holder shall furnish BG / LUT to the licen .....

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rox copy of these documents were submitted to the department and illustrative copies of these documents from August 2008 to May 2009 are enclosed in the appeal paper books. The learned Counsel further submitted that the bond to fulfill export obligation can be and is to be executed by the EPCG Licence holder only and not by the appellant. In support of his contention, the learned senior Counsel submitted that the CBEC vide Circular No. 305/83/94-FTT dated 15.09.1994 has clarified to same effect. .....

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the excise duty can be demanded only from manufacturer is not of universal application and is not without exception. It can be shifted to any other person by the statute, particularly with the consent/approval of the other person. In support of the said proposition, the learned Senior Counsel submitted that the Rule 196 forming Chapter X of erstwhile Central Excise Rules, 1944 prescribed similar arrangements. Further, Rule 6 of the Central Excise (Removal of Goods at concessional rate of duty f .....

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rtificate 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 th .....

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ntion of the learned senior Counsel was that non-submission of details of export obligation, block wise by the EPCG licence holder is not relevant. Moreover, the show-cause notice does not demand duty block-wise. Full duty has been demanded and the appellant have been able to get the copies of the EODC obtained by the EPCG Licence holders. The learned senior Counsel also submitted that the duty demand on the imported inputs by denying the benefit of Notification No. 53/97-Cus or 52/03-Cus is not .....

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pression used in the above said Notification. It is also submitted that total of all DTA clearance i.e. normal DTA and to EPCG customer is well within the permissible limits of 50%. It was submitted that the Commissioner has conveniently mis-read Condition No.3 of the Notification No. 52/2003-Cus. It was further submitted that the opening part of para 3 is what is relevant to present case and para 6.9 (e) of the Policy is not relevant. It was further submitted that for similar reasons duty deman .....

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s are otherwise eligible to avail benefit of Sl. No. 2 of Notification No. 23/03-CE. Therefore, demand 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 .....

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a 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. The first error is that the department in demanding differential excise duty in the show cause notices covering the period from May, 2005 to May, 2009 (except April 2007 to February, 2008) has taken into account .....

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rmed by the Larger Bench of Tribunal in Kumar Arch Tech Pvt. Ltd. v. CCE 2013 (290) ELT 372 (Tri. LB). 3.15 It was also submitted that the department in demanding differential excise duty in the show cause notices covering the period from April, 2006 to March, 2007 and April, 2007 to March, 2008 has taken into account the SAD @ 4% as a component in aggregate duty of customs, which is incorrect as the SAD is exempted in terms of Serial No. 1 of Notification No. 23/2003-CE subject to the condition .....

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f Notification No. 29/04-CE. In fact, for the period from March, 2008 to 7.12.2008, the department has taken the excise duty @ 8% ad valorem as per Notification No. 29/04-Cus. Further, from 8.12.2008 to May, 2009, excise duty rate has been taken @ 4% ad valorem by the department. 3.16 It was also submitted that the demand of differential excise duty in the show cause notices covering the period from April, 2007 to February, 2008 has not considered exemption in terms of Serial No. 2 of Notificati .....

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ect 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 Assist .....

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ioner of Central Excise to the Customs Revenue Audit, shows that the department was fully aware of the clearances made by the appellants to the EPCG licence holders at 5% duty and procedure being followed by appellants. It was also submitted that duties payable on supplies to EPCG license holder is entirely available as refund of terminal excise duty. Therefore the exercise is revenue neutral. Hence, there cannot be intention to evade duty. Similar view is taken by the CESTAT in the case of Hind .....

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pirit. The duty was paid on removal. The appellants themselves assessed the excise duty and paid the same. Monthly Returns were filed. Invoices for clearance of the goods were issued. Hence, Rule 25(1)(a) is not attracted. Similarly, Rule 25(l)(b) deals with accounting of any excisable goods is also not attracted. Similarly, clause (c) of Rule 25 (1) is not invocable in the present case since the same is applicable only to a manufacturer conducting any activity without having any registration. T .....

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duty" and therefore, confiscation of goods is uncalled for. Another submission made was that the Goods are not available for confiscation and therefore question of imposing redemption fine does not arise and in support of the said contention, the judgement of the Hon'ble Bombay 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 .....

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t, 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 excise/customs dut .....

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ndition nos. 5 & 6 of the opening paragraph of Notification No.22/2003-CE. The learned AR submitted that in case the procedure prescribed by the said Rules of 2001 are not followed by the person who intends to receive goods at concessional rate of duty and yet the manufacturer of goods clears them at concessional rate of duty, in such case duty has to be demanded from the manufacturer of goods. In support of his contention the learned AR submitted the decision of the Hon'ble Supreme Cour .....

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. In case any condition is to be fulfilled before clearing such goods, the manufacturer making the assessment has to ensure that they are fulfilled, in case the conditions are not so fulfilled, and yet the concession/exemption is applied, the self assessment is a deliberate wrong assessment. The conditions of Rules and exemptions have to be strictly applied and followed and the words of the Notification have to be given their effect. In support of his contention, the learned AR quoted the follow .....

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s 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 pur .....

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(SC) (b) Indian Oil Corporation Ltd. 2012 (276) ELT 145 (SC) (c) CCE v. Harichand Shri Gopal 2010 (260) ELT 3 (SC) (d) HPCL 2014 (301) ELT 554 (T) (e) Eagle Flask Industries Ltd. 2004 (171) ELT 296 (SC) (f) Indian Aluminium Co. 1991 (55) ELT 454 (SC) (paras 3 and 5 to 8) (g) Arun International 2015 (317) ELT 465 (T) (h) Bombay Dyeing & Mfg 2001 (129) ELT 604 (T-LB) (i) Jayesh Containers 1996 (84) ELT 7 (SC) 4.2 The Commissioner (AR) further submitted that ER-2 returns were self assessed by t .....

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se are: - Para 2 (1) -verification of genuinity of original licence and its invalidation for procurement - Para 2 (2)- Bond binding to fulfill export obligations - Para 2(3)- to monitor block wise EO fulfillment and if not fulfilled to demand duty and interest as prescribed - Para 2(4)-to verify installation of goods in 6 months and to consider any plea of extension of time required to install if reasons are genuine. - Para 2(5)-to ensure that DGFT does not give any block wise extension for fulf .....

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/imported are as defined as Capital goods and that the Export Obligation claimed to be fulfilled is only in terms of EXPORT OBLIGATION as defined. 4.3 It was further submitted that the above mentioned conditions are mandatory conditions and until and unless the consignee is registered with the Revenue in such manner that the verification, eligibility to entitlement and fulfill all continuing obligation is possible benefit of notification cannot be extended. Learned Commissioner (AR) further subm .....

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r 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 satisfact .....

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ted that since the appellants have cleared the goods without ensuring that the conditions mentioned in the Notification No.44/2002-Cus and 55/2003-Cus are not fulfilled, they only are required to pay the duty. The fact that latter on they are able to produce EO certificate in respect of certain consignments and also installation certificate in respect of good covered by some invoices is of no consequence as these were required to be produced at an appropriate time and to the appropriate authorit .....

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e. The AR further quoted the larger bench decision of this Tribunal in the case of Bombay Hospital Trust 2005 (188) ELT 374 (T-LB), which have been upheld by the Hon'ble High Court as reported in 2006 (201) 555 (Bom). Learned AR further submitted that the appeal against the said judgment was dismissed by the Hon'ble Supreme Court 2015 (315) ELT A26. It was further submitted that the ratio of the said judgment have been upheld in the case of Fortis Hospital Ltd. 2015 (318) ELT 551 (SC). 4 .....

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d 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 .....

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g. 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 the ratio of the judgment in the case of Ashok Traders has been held as good law by Full Bench of the Supreme Court in the case of Garden Silk Mills 1999 (113) ELT 358 paras 21, 39 & 40 and the same principle has been enunciated by a Full Bench of the Hon'ble Supreme Court in Motiram Tolaram 1999 (112) ELT 749 (SC), which was following .....

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the issue relating to the recovery of duty on raw materials procured duty free under Notification No.22/2003-CE and 52/2003-Cus learned Commissioner (AR) submitted that such goods have not been proved to the satisfaction of the AC/DC to have been used in connection with production or packaging of goods for export out of India and hence duty demand is reasonable. The learned AR further submitted that the Condition 4(a)(ii) & (iii) of opening paragraph of Notification No.22/2003-CE and Condit .....

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ns and conditions as may be specified in this behalf..... " 4.10 It was also submitted that no permission is taken from the Development Commissioner or the AC/DC for such clearances. Further, the clearances were not made on payment of appropriate duty of Central Excise leviable under Section 3 of the Central Excise Act, 1944. If appropriate duty is not paid at the time of clearance, the conditions of the aforesaid opening paragraphs of the said Notifications mandate recovery of duty on the .....

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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 a .....

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4.12 The learned AR further submitted that the learned Counsel for the appellant has raised the issue relating to error in rate of duty during certain period, SAD, etc. None of these points were taken up by the appellant before the Commissioner at the time of adjudication. These points were not taken even in the grounds of appeal. No application has been filed by the appellant under Rule 10 of the CEGAT (Procedure) Rules, for amending the ground of appeal and the learned senior Counsel cannot be .....

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fication No.30/2004- CE for countervailing duty purpose and this is the same notification which is in dispute in this case. He further submitted that the ITC Ltd., case was decided by this Tribunal taking into accounts the following case laws: (i) Motiram Tolaram v. UOI 1999(112) ELT 749 (ii) Ashok Traders v. UOI 1987 (32) ELT 262 (iii) Gujarat Plastic Industries v. UOI 2003 (160) ELT 125 (iv) Priyesh Chemicals & Metals v. CCE 2000 (120) ELT 259 5.2 After noticing these decisions and also re .....

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ram held that imported goods will not be entitled for exemption from payment of CVD, under Notification No. 185/83-CE. It was submitted 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 ex .....

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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 Hon'ble Tribunal has distinguished the invocation of B-17 bond in the case of CCE v. Emcure Pharmaceuticals Ltd., 2014 (307) ELT 180 (Tri-Mum). The Tribunal in th .....

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lity of the Notification No.44/2002-Cus dated 19/04/2002 and 55/2003-Cus dated 01/04/2003 (both notifications are similar) and the liability of the appellant or his customer with reference to the said notification. For proper understanding of the issue, Notification No.44/2002-Cus is reproduced below: Import under EPCG scheme - Capital goods, components and spares thereof -Exemption In exercise of the powers conferred by sub-section (1) of Section 25 of the Customs Act, 1962 (52 of 1962), the Ce .....

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d Customs Tariff Act. 2. The exemption contained in above paragraph, shall be 2, subject to the following conditions, namely :- (1) the goods imported are covered by a valid licence issued under the Export Promotion Capital Goods (EPCG) Scheme in terms of Chapter 5 of the Export and Import Policy permitting import of goods at the rate of five percent duty and the said licence is produced for debit by the proper officer of the customs at the time of clearance; Provided that for the import of spar .....

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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 fulf .....

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(3) the importer produces within 30 days from the expiry of each block from the date of issue of licence or within such extended period as the Assistant Commissioner of Customs or Deputy Commissioner of Customs may allow, evidence to the satisfaction of the Assistant Commissioner of Customs or Deputy Commissioner of Customs showing the extent of export obligation fulfilled, and where the export obligation of any particular block is not fulfilled in terms of the preceding condition, the importer .....

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s factory or premises and a certificate from the jurisdictional Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise or an independent Chartered Engineer, as the case may be, is produced confirming installation and use of capital goods in the importer's factory or premises, within six months from the date of completion of imports or within such extended period as the said Assistant Commissioner of Customs or Deputy Commissioner of Customs may allow : Provided tha .....

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on (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 sh .....

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for use, the said goods may be re-exported back to the foreign supplier within 3 years from the date of payment of duty on the importation thereof: Provided that at the time of re-export the goods are identified to the satisfaction of the Assistant Commissioner of Customs or Deputy Commissioner of Customs as the goods which were imported. TABLE S.NO. Description of goods (1) (2) 1. Capital goods. 2. Capital goods in SKD/CKD condition to be assembled into capital goods by the importer. 3. Compone .....

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packaging machinery and equipments, refractories, refrigeration equipment, power generating sets, machine tools, catalysts for initial charge, and equipment and instruments for testing, research and development, quality and pollution control; (b) use in manufacturing, mining, agriculture, marine, aquaculture, animal husbandry, floriculture, horticulture, pisciculture, poultry, viticulture and sericulture; (c) rendering services; (2) "Export and Import Policy" means the Export and Impor .....

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eans 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 .....

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Cus., dated 19-4-2002] 6.2 Perusal of the said notification would indicate that) the benefit of said notification is available in respect of the goods specified in the table annexed to the said notification. In the table there are four serial numbers covering different categories of goods. First serial number covers the capital goods. There is no dispute between the Revenue and the appellant that; the goods in this case, namely, carpets are covered by the said entry. Paragraph 2 of the said Noti .....

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the CIF value of the goods 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 condition (ii) above, in addition to overall export obligation, the importer is expected to fulfill certain percentage of total export obligation in different years as is specified in the table. For example, in case licence value is less than ₹ 100 crore, in the first two years the export obligation to be fulfilled is NIL but .....

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ut can be fulfilled in 1st and 2nd year. Similarly, in respect of licence value of 100 crore and above, different export obligation limits are prescribed in the notification. In case the licence value is more than ₹ 100 crore, the export obligation is required to be fulfilled in a period of twelve years instead of eight years. Different percentage for block of different years is provided in the notification. (iii) The condition No.(iii) provides for monitoring of the block-wise export obli .....

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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 Ex .....

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a period of two years or regularization of shortfall in export obligation, not exceeding five percent of such export obligation and the AC/DC may condone the said shortfall in block-wise period or overall period of export obligation. It will thus be seen that the AC/DC is not only empowered to monitor the export obligation over the different years but also is empowered to extend this period upto two years if the licensing authority; has granted similar extension. Similarly, shortfall in export .....

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fulfil various obligations detailed in the notification. The benefit of the notification cannot be extended without execution of the bond to fulfil the conditions relating to the export obligation. Similarly, importer is required to produce a certificate that the goods imported are installed in the importers factory or premises and a certificate to that effect is required to be produced from the AC/DC or an independent Chartered Engineer. It is also interesting to see that the term export obliga .....

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oods. Thus, the importer is required to fulfil 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 f .....

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oned 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 clearance from the factory of production, conditions which are required to be fulfilled at the time of import are similarly required to be fulfilled at the time of clearance. In case of clearance from a factory the system being followed is self assessment by the manu .....

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t situation, it would mean that the appellant manufacturers should ask his customers whether they have informed their jurisdictional Customs authorities, executed the bond with the concerned authorities relating to the fulfilment of the export obligation as also the block-wise fulfilment of the export obligation. The appellant manufacturer was also required to ensure that the customers have submitted the invalidation letter along with copy of the EPCG licence to the concerned authority so that t .....

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be fulfilled by the customers of the appellant manufacturer or the service provider in the present case, it is only after the above procedure that the Revenue could have monitored the export obligation, instillation of the goods and other conditions of the notification. In case of any default in fulfilment of any of the condition, the Revenue would have taken action against the customers of the manufacturers who fail to fulfill any of the above post importation conditions. For example, if the ca .....

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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 ch .....

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ting to obligation of the customers and not of the appellant. In view of the above discussion, in our view these submissions do not merit any consideration and are required to be rejected. We accordingly reject all such submissions. The learned Senior Counsel has submitted that format of the bond is not specified by AC/DC. No customer of appellant or even the appellant has even approached for it. In any case, these are standard formats which appellant's customer would have executed for impor .....

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id rules and for this purpose, the customers should have approached their jurisdictional authorities and produced the EPCG licence along with invalidation certificate and thereafter executed the bond as required under Notification No.44/2002 or 55/2003. Once these details steps were completed and after obtaining the relevant permission, appellant could have cleared the goods to his customers availing the benefit of exemption Notification Nos.44/2002 & 55/2003. Further, the appellant should h .....

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he constitution bench of the Hon'ble Supreme Court in the case of CCE New Delhi v. Hari Chand Shri Gopal in 2010 (260) ELT 3 (SC) has observed as under: Exemption Clause - Strict Construction 22. The law is well settled 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 .....

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he 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 a notification has to be interpreted in the light of the words employed by it .....

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which are of substantive character and were built in with certain specific objectives of policy, on the one hand, and those which are merely procedural and technical in their nature, on the other, must be kept clearly distinguished. In Tata Iron and Steel Co. Ltd. (supra), this Court held that the principles as regard construction of an exemption notification are no longer res integra; whereas the eligibility clause in relation to an exemption notification is given strict meaning wherefor the n .....

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designed to avoid hardship in cases where a party does all that can reasonably expected of it, but failed or faulted in some minor or inconsequent aspects which cannot be described as the "essence" or the "substance" of the requirements. Like the concept of "reasonableness", the acceptance or otherwise of a plea of "substantial compliance" depends upon the facts and circumstances of each case and the purpose and object to be achieved and the context of the .....

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ual 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 imp .....

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ance seeks to preserve the need to comply strictly with the conditions or requirements that are important to invoke a tax or duty exemption and to forgive non-compliance for either unimportant and tangential requirements or requirements that are so confusingly or incorrectly written that an earnest effort at compliance should be accepted. The test for determining the applicability of the substantial compliance doctrine has been the subject of a myriad of cases and quite often; the critical quest .....

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a mere attempted compliance may not be sufficient, but actual compliance of those factors which are considered as essential. 25. The details to be furnished in Form No. 1 as per Rule 192 and the declaration to be made, relate to the "substance" and "essence" of Chapter X. R-2 Registration Certificate is also pre-requisite to obtain CT-2 Certificate. Further, the execution of bonds as provided in that chapter is also not an empty formality for obtaining the duty free excisable .....

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respondents have laid great emphasis on maintenance of some statutory registers and filing of periodical returns at the recipient unit, so as to take the shelter under the doctrine of substantial compliance for remission of duty. Respondents pointed out that they, had identical columns in the registers kept at the recipient end, hence, the requirement of maintaining separate register at the supplier end and the requirements of Chapter X was substantially complied with. It may be noted that RG-1 .....

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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 .....

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to prove to the satisfaction of the Central Excise Officer that the goods are for the intended use specified in the notification of exemption or whether in addition the procedure laid down in Rule 192 of Chapter X of the Rules was also to be complied with for availing concession under the exemption notification was raised before this Court in Thermax Private Limited v. The Collector of Customs (Bombay), New Customs House [1992 (61) E.L.T. 352 (S.C.) (1990) 4 SCC 440] and a two-Judge Bench of thi .....

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of Customs, Bombay v. J.K. Synthetics Limited [1996 (87) ELT 582 (SC) = (1997) 10 SCC 224] as not laying down principle and held to be limited to eligibility for concession under Rule 192 of the Rules. In the aforesaid decision in the case of Collector of Customs, Bombay v. J.K. Synthetic Limited (supra) this Court took the view that where there was evidence on record that show the intended use of the material, the benefit of exemption could be granted. In a subsequent decision in the case of Co .....

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The Collector of Customs (Bombay),New Customs House (supra) and Collector of Central Excise, Jaipur v. J.K. Synthetics (supra) 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 c .....

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pect 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 of clearances, the jurisdictional authorities had the discretion and could have verified whether the carpets cleared were in fact installed in the hotels and are being used for fulfillin .....

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under the exemption notification. These facts cannot be verified by the said EODCs. It is a well settled principle of law that if particular scrutiny needs to be done at a particular point of time then the same should be done at that point of time and not at any point of time. The learned Senior counsel's another contention was that both the notifications provides for extension of time for producing installation certificate. We have gone through the said provision. It is true that the notifi .....

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n of time and producing the certificate at any point of time and take the plea that the AC/DC was competent to extend the time limit. Such an interpretation will make the time limit redundant. Similar is the position in respect of the block-wise export obligation to be fulfilled. The learned Counsel has quoted the judgement of this Tribunal in the case of J.K. Corporation Ltd. (supra). We have gone through the said judgement. In the said case the facts were that the appellants had cleared the go .....

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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 clearanc .....

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tion has been fulfilled using the said carpets and whether the carpets were installed immediately after the clearance, etc. cannot be verified and therefore, the plea is required to be rejected outright. It was also submitted by the Senior Counsel that amount of bond, form of bond and to whom the bond is to be executed etc. have not been specified by the proper officer and only thereafter bond could have executed. We are ' not impressed with such arguments for the simple reason that the appe .....

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2.27 of the policy, in case of indigenous procurement, the LUT has to be given to the DGFT. We are not impressed with this argument. The customs notification does not provide for any relaxation for the execution of bond and does not provide that such a bond can be executed with DGFT. Under these circumstances, the bond is required to be executed with the customs authorities alone. The LUT to be executed with DGFT will be for DGFT purpose and not for the purpose of benefit of notification No.44/ .....

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benefit of Notification No.44/2002 or 55/2003, Another contention of the learned senior Counsel was that the proposition that excise duty can be demanded only from the manufacturer alone is not without exception. We do not find that Revenue has made any such claim. Revenue's contention is that the appellant was 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 .....

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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, c .....

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saloon cars which were registered as taxies and they produced evidence of registration to the Central Excise authorities. However, later on some of the buyers of the taxis got the registration changed from taxi to the normal saloon cars and the Revenue wanted the recover the duty from the manufacturer. In these circumstances, the Tribunal took the view that the manufacturer has fulfilled his obligation inasmuch as the saloon cars cleared were initially registered as taxies and therefore, duty c .....

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rities in terms of Notification No.44/2002 and 55/2003and also produce the EPCG licence, invalidation certificate, etc. which were required to be debited by the jurisdictional authorities after examining the validity of such licence. Under these circumstances duty is to be demanded from the appellant alone. We are also not impressed with the Senior Counsel's arguments that non-submission of details of export obligation block-wise by the EPCG licence is not relevant and show-cause notice does .....

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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 Divi .....

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r submitted that the Hon'ble Supreme Court in the case of SRF Ltd. (supra) has also disposed of the appeal relating to ITC(CA No.1632 of 2009) and the said appeal was relating to the notification NO.30/04-CE which is the same notification which is under dispute in the present case. It was also submitted that the Tribunal has relied upon the following judgement in the ITC case: (i) Motiram Tolaram v. UOI 1999(112) ELT 749 (ii) Ashok Traders v. UOI 1987(32) ELT 262 (iii) Gujarat Plastic Indust .....

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s a deeming provision for goods and make no reference for description and class of articles. Learned Commissioner (AR) further quoted Hon'ble Supreme Court decision in the case of IFFCO - 2000 (115) ELT 11 (SC), Hansur Plywood Works - 1992 (61) ELT 4 (SC), Western India Plywood - 1989 (44) ELT 595 (SC), and further submitted that the explanation to Section 3 (1) of Customs Tariff Act is not similar. The learned Commissioner (AR) submitted that the decision of the Hon'ble Supreme Court in .....

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;ble Supreme Court it will be important to re-produce the relevant portion of the Section 3 (1) of the Central Excise Act, 1994. The relevant portion of the said section 3 viz., proviso and clause (ii) of proviso is reproduced below: Provided that the duties of excise which shall be levied and collected in any excisable goods which are produced or manufactured. (ii) by a hundred per cent export-oriented undertaking and Drought to any other place in India, shall be an amount equal to the aggregat .....

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e 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 d .....

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100% EOU can import and procure locally all capital goods, raw materials, components, consumables, etc. free of Customs duty or excise duty, which is not so in respect of other units located in India or popularly called Domestic Tariff Area (DTA) unit. Concept of 100% EOU was started with an idea that these units will export entire production. However, later on the Government relaxed this condition, and part of the goods were allowed to be sold within India, i.e. DTA and the duty liability in re .....

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s producing similar goods. In fact somewhat similar provision exists in respect of countervailing duty chargeable under Section 3 (1) of the Customs Tariff Act; 1975 and the same would be discussed in the subsequent paragraphs. The object of explanation in Section 3 (1) of the Customs Tariff Act, is to ensure that the goods produced in India are not put to disadvantages vis-a-vis the imported goods. 8. It would be worthwhile to mention that Section 3 of the Customs Tariff Act, 1975 has been intr .....

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al taxes such as excise duty, sales tax, octroi, etc. are concerned. 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 th .....

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ay, 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 not produced or manufactured in any State, then, having regard to the excise duty which would be leviable for the time being in different States on the class or description of alcoholic liquor to which such imported alcoholic liquor belongs. Explanatio .....

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uty. 8.1 Normally if there is a single rate of excise duty on an article being imported, no difficulty is faced in levying the same as per Section 3 (1). But the difficulty arises when the goods are leviable to more than one rate of excise duty. As per the explanation in such a situation, highest rate of duty is required to be taken. The question arises why there should be more than one rate of duty. More than one rate of duty can be for variety of reasons. It is possible that for a particular g .....

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collected at a particular stage and subsequent stages of manufacturing may be exempt subject to certain conditions. This is generally done keeping in view the size (i.e. large or small) or number of manufacturers and administrative convenience or limitation in collecting the excise duty. Collecting tax from large number small scale units creates lot of administrative work for tax administration and also uncalled tax compliance burden on small scale units. Moreover, value addition may not be subs .....

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f 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 .....

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suffer duty on the goods manufactured by them, even though in case of latter category, one gets an impression that duty is Nil-Explanation to Section 3 (1) of the Customs Tariff Act comes into play. In such a situation, a highest of the two rates are required to be applied. If that is not done it will defeat the objects and purpose of Section 3 (1) of Customs Tariff Act. For example if such down stream products are imported from abroad then no countervailing duty will be chargeable while the man .....

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ric, processed fabric, garments, carpets, made up, etc., manufacturers were given two options. First option was to remain in the Cenvat chain, i.e. take the credit of duty paid on inputs such as, yarn, dyes, colours and other chemicals used in the manufacturing process and pay a duty of 8% on their final products. This is covered by Notification NO.29/2004-CE. The second option was that don't avail the credit of duty paid on inputs such as yarn, dyes, colours chemicals, etc. and pay no duty .....

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EOU and as per proviso to Section 5A(1) of the Central Excise Act, the above mentioned exemption notifications are not applicable to 100% EOUs. However, for the purpose of computing countervailing duty when the goods are being cleared from 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 .....

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n 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 during the course of the arguments, the learned Senior Counsel made an .....

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g to the said case laws, which are elaborated in paragraphs 3.12, 3.13, 5.0 and 5.1 above. The learned Commissioner (AR) on the other hand made his submission that the said decision is not applicable to the facts of the present case, as detailed in para 4.5, 4.6 and 4.7 above. 8.6 Without going into various technicalities raised by the learned Commissioner (AR) such as other decision of the Hon'ble Supreme Court are of three members Bench while the present case is of two members bench, etc. .....

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llowing effect: If no credit under Rule 3 or Rule 11 of the Cenvat Credit "20. Rules, 2002, has been taken in respect of the inputs or capital goods used in the manufacture of these goods." 5. The aforesaid condition is to the effect that the importer should not have availed credit under Rule 3 or Rule 11 of the Cenvat Credit Rules, 2002, in respect of the capital goods used for the manufacture of these goods. 6. In the present case, admitted position is that no such Cenvat credit is a .....

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#39;[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 aforesai .....

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oms, New Delhi' [Civil Appeal No. 2616 of 2001 - 2015 (318) E.L.T. 3 (S.C.)], the principle which was laid down in Thermax Private Limited and Hyderabad Industries Limited was summarised in the following manner :- The ratio of the aforesaid judgment in "15. Thermax PrivateLimited (supra) was relied upon by this Court in Hyderabad- Industries Ltd. (supra) while interpreting Section 3(1) of the Tariff Act itself; albeit in somewhat different context. However, the manner in which the issue .....

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e if produced or manufactured in India. The condition precedent for levy of additional duty thus contemplated by the explanation deals with the situation where 'a like article is not so produced or manufactured'. The use of the word 'so' implies that the production or manufacture referred to in the second limb is relatable to the use of that expression in the first limb which is of a like article being produced or manufactured in India. The words If produced or manufactured in In .....

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is not necessary. For quantification of additional duty in such a case, it has to be imagined that the article imported had been manufactured or produced in India and then to see what amount of Excise duty was leviable thereon." 8.7 We note that the issue before the hon'ble Supreme Court was not that there are two rates of duties and higher of the two rates are required to be taken as envisaged in Explanation to Section 3 (1) of the Customs Tariff Act:. But the issue was whether the ben .....

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lanation 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 .....

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. Accordingly, we do not propose to uphold the decision of the High Court because, it seems to us that it is wrong in principle and cannot be justified by the terms of the relevant provisions. A decision should be treated as given per incuriam when it is given in ignorance of the terms of a statute or of a rule having the force of a statute. So far as the order shows, no argument was addressed to the Court on the question or not whether any direction could properly be made compelling the Municip .....

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arty because of point A, which it considers and pronounces upon, It may be shown, however, that logically the court should not have decided in favour of the particular party unless it also decided point B in his favour; but point B was not argued or considered by the court. In such circumstances, although point B was logically involved in the facts and although the case had a s pecific outcome, the decision is not an authority on point B. Point B is said to pass sub-silentio. 12 In Gerard v. Wor .....

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KB 675. the Court 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 with .....

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nent, 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 of a provision based on their own preconceived notions of ideological structure of scheme into which the provision to be interpreted is somewhat fitted. They are not entitled to usurp legislative function under the disguise of interpretation. 15. Two principles of construction - .....

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nstrued with reference to the context and other clauses thereof so that the construction to be put on a particular provision makes a consistent enactment of the whole statute. This would be more so if literal construction of a particular clause leads to manifestly absurd or anomalous results which could not have been intended by the legislature. "An intention to produce an unreasonable result", said Danckwerts, L.J., in Artemiou v. Procopiou (at All ER p. 544-1), "is not to be imp .....

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rpretation which makes the wordings of a section or part of section of an act redundant cannot be accepted. More over, the interpretation of law is to further the cause of object and purpose of legislation. Keeping in view the above principles as also the fact that the hon'ble Supreme Court's judgment of sub-silentio, in our view, the judgment of the hon'ble Supreme Court does not help the cause of the appellant and a plain reading of the Explanation 1 to clause (ii) of proviso to Se .....

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nits 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 th .....

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le computing the Customs duty, basic Customs duty is to be seen from Customs Tariff Act read with exemption notification of Customs duty. However, Additional duty of Customs or CVD is leviable as per Section 3(1) of the Customs Tariff Act, 1975. The said sub-section reads as under :- "Section 3. Levy of additional duty equal to excise duty, sales tax, local taxes and other charges. (1) Any article which is imported into India shall, in addition, be liable to a duty (hereafter in this sectio .....

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ise duty for the time being leviable on a like article if produced or manufactured in India" means the excise duty for the time being in force which would be leviable on a like article if produced or manufactured in India or, if a like article is not so produced or manufactured, which would be leviable on the class or description of articles to which the imported article belongs, and where such duty is leviable at different rates the highest duty." Thus, in order to determine Additiona .....

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the goods to be covered by Notification No. 30/2004-C.E., Revenue is claiming that applicable Notification is 29/2004. There is no dispute that excisable goods cleared by the appellant are covered by both the notifications. However, rates and conditions are different 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 r .....

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on) 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 is leviable at different rates, t .....

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tion 1 to Section 3(1) of the Central Excise Act, 1944 (which is specific to 100% Export Oriented Units), we have no hesitation in holding that rates prescribed under Notification No. 29/2004-C.E., which are higher than prescribed under Notification No. 30/2004-C.E. will be applicable. We accordingly hold that Additional duty of Customs will be computed as per Notification No. 29/2004-C.E. and Notification No. 30/2004-C.E. 8.9 Keeping in view the above analysis, in our view the judgment of the H .....

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ting to clearance from 100% EOU to DTA. Moreover, judgment of Hon'ble Supreme Court is sub silentio in the Explanations. In our considered view, as far as computation of the countervailing duty is concerned the duty rate applicable will be as per Notification No.29/2004-CE and not as per Notification No.30/2004-CE. We therefore, reject the contention of Learned Senior Counsel in this regard. 9. We find that in the impugned order the appellants have been denied the benefit of Notification No. .....

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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 fo .....

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issioner, SEEPZ SEZ stating that the performance of the unit has been monitored for the block period 2003-2004 to 2007-2008 and it is confirmed that appellant have fulfilled NFE for the aforesaid period on cumulative basis. Another letter No.SEEPZ-SEZ/EDU/28/37/97/ 01-02/VOI.IV/7051 dated 28/04/2015 is produced to support this contention. We have considered the submissions and we find strength in the arguments of the Senior Counsel. In our view, prima facie the appellant will be entitled to the .....

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im. The Commissioner may examine and thereafter decide the eligibility or otherwise. 10. 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. There is no dispute that the inputs which were imported or procure .....

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llant 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. We accordingly set aside the demands of Customs duty amounting to ₹ 2,83,88,952/- along with interest, etc. and also Central Excise duty amounting to ₹ 9,83,474/- along with interest. Penalties corresponding to these demands are also set aside. 11. We find that extended period of limitations have been invo .....

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8 (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 .....

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proper assessment and payment of duty has been confiscated under Rule 25 of the Central Excise Rules, 2002 and the appellant has been given an option to the noticee to redeem the same on a fine of ₹ 2.00 crore. We find in the present case, the goods are not available for confiscation. Moreover, the goods were cleared on payment of duty (though there is a dispute about the rate/quantum of duty). In our considered view this is not a appropriate case for redemption of fine. We therefore, set .....

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