9911796707
TMI Blog2015 (11) TMI 1471X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Development Commissioner and on 29.03.2011, the Development Commissioner granted in principle approval. There is no dispute that after grant of, in principle, approval, the EOU stopped procuring duty free material for use in the manufacture of finished products of export. The jurisdictional Central Excise Authorities, thereafter, checked the stock of the inputs capital goods and finished goods and determined the duty to be paid at the time of debonding, which was paid on 12.04.2011 and 14.04.2011. On 28.4.2011, the NOC was issued by the jurisdictional Assistant Commissioner and on 10.06.2011, the final debonding order was issued by the Development Commissioner. On 1.2.2012, the bond executed by the appellant was discharged by the Assistant Commissioner. 1.2. At the time of in principle approval, there was some stock of finished goods and work in progress. At that time, the department while calculating the duty payable at the time of debonding, calculated duty only on the finished goods at the rate prescribed under proviso to Section 3(1) of the Central Excise Act, 1944 read with exemption notification no23/03-CE. The appellants view was, however, that since these finished ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tariff, Pyridine residue consisting of Lutadine Isomers also comes into existence. Since the Lutadine Isomers residue has no export market but it can be processed by the appellant's DTA Unit, the same during the period of dispute, was being cleared to DTA unit through a pipe line. There is no dispute that the appellant were paying duty on the DTA clearances of Lutadine Isomers (Pyridine residue) on payment of duty in terms of proviso to Section 3 (1) of the Central Excise Act, 1944 read with notification no.23/03-CE. The assessable value of the goods for the purpose of valuation had been determined by them under Section 14 of the Customs Act, 1962 as about Rs. 60,000/- p.m.t. which was based on the Board's Circular No.268/85/CX dated 29.09.94. The appellant had also classified the Lutadine Isomers being cleared by them under Heading no.2933 3919 as derivatives of Pyridine. However, subsequently, during the period of dispute, the appellant revised the assessable value to about Rs. 30,000/- p.m.t. in terms of the Board's Circular No.9/33/23/2010-CX dated 16.08.2010 withdrawing the Boards Circular No.268/85-CX dated 29.09.1994. The department was of the view that Lutadine Isome ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al only the duty foregone on the inputs contained in the finished goods is payable and as such, no duty on the finished goods and on the work in progress by treating them as finished goods is payable, the Commissioner has confirmed the duty demand of Rs. 3,37,48,484/- by holding that not only the duty on the stock of finished goods and work in progress by treating them as finished goods as on the date of in principle approval for debonding is payable, even the exemption Notification no.23/03-CE is not applicable, that this decision of the Commissioner is contrary to the Tribunals order in the appellant's own case decided vide order no.57742/2013-EX (DB) dated 5.9.2013, that when the Commissioner has sanctioned and paid the refund equal to the difference between the duty charged by the department on the stock of the finished goods on the date of in principle approval and the duty foregone on the inputs contained in the finished products, he cannot once again reopen this issue and recover the duty on the finished goods by denying the exemption not only on the stock of the finished goods but also on the stock of the work in progress by treating the same as finished goods, that the en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st for initial charge is covered by the definition of 'capital goods' in Foreign Trade Policy and there is nothing in para 9.12 of the Foreign Trade Policy containing definition of capital goods, from which it can be inferred that this definition is applicable only to EPCG Scheme and not to 100% EOU , that the Commissioners finding that the imported Catylist was cleared without being used and not for initial charge is factually incorrect and in giving this finding, the Commissioner has travelled beyond the allegation made in the show cause notice, that in the show cause notice, the duty is sought to be demanded without depreciation only on the ground that the definition of 'Catylist' in para 9.12 of the Foreign Trade Policy is only for EPCG scheme and not for 100% EOU and this contention of the department is totally incorrect, that in view of the above submissions, the impugned order is not correct ,that the appellant have strong prima facie case in their favour and hence, the requirement of pre-deposit of duty demand, interest and penalty may be waived for hearing of their appeal and recovery thereof may be stayed. 4. Shri Pramod Kumar, learned Joint CDR, opposed the stay applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able on the stock of the finished goods on the date of in principle approval for debonding as a 100% EOU, even after in principle approval for debonding would continue to be treated as 100% EOU till the date of final debonding order. In this regard, para 6 and 7 of the order are reproduced below:- "6. The appellant's unit, on the basis of their application for debonding, had been granted in-principle approval for debonding by the Development Commissioner's letter dated 25.3.2011. The debonding was subject to the payment of customs and excise duty as applicable on the stock of import and indigenous capital goods, raw materials, components, consumables and spares and finished goods in stock. The quantum of duty payable is to be approved by the jurisdictional central excise officers. The stock taking of the inputs, capital goods and finished goods was done on 31.3.2011 and at that time, there was some stock of finished goods involving duty of Rs. 29,17,195/- as calculated in terms of the proviso to Section 3(1) of the Central Excise Act. Though according to the appellant, the stock of finished goods was meant for export and was to be exported shortly and hence, no duty was chargeabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... int of time of removal of those goods from place of manufacture. In this case, admittedly, there was no removal of goods into DTA from EOU and before the final debonding order the goods had been exported out of India under advance authorization claim. In terms of para 6.18 (e) of the Foreign Trade Policy, while between the date of issue of no dues certificate by the Customs and Central Excise Authorities and the date of final debonding order by the Development Commissioner, the EOU unit shall not be entitled to claim any duty exemption for procurement of capital goods or inputs, the unit can claim advance authorization/DEPB/duty draw back. Thus, during the intervening period between the date of no objection certificate by the Central Excise Authorities and the date of issue of final debonding order by the Development Commissioner, an EOU can export the finished goods under claim for advance authorization/DEPB/duty draw back and that no excise duty can be charged in respect of such goods as the same have not been cleared into DTA. In view of this, the impugned order rejecting the refund claim is not sustainable. The same is set aside. The appeal is allowed." 6.1. The Department doe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner's order is prima facie not correct and as such, in respect of this duty demand is waived as the appellant have strong prima facie case in their favour. 8. The third component of the duty demand of Rs. 8,12,05,337/- is in respect of clearance of the pyridine residue consisting mainly of mixture of Lutadine Isomers to their DTA Unit. There is no dispute that during the period of dispute i.e. from 1.4.2003 to 31.03.2011, the appellant were making DTA clearances of Pyridine Residue by classifying the same under sub-heading no.2933 3919 as 'other derivatives of Pyridine' and for the purpose of payment of duty, they had adopted the value of about Rs. 30,000/- p.m.t. There is also no dispute that during this period, the appellant were filing ER-2 Returns in which the clearances of Pyridine Residue to DTA Unit had been declared. The duty demand on these clearances of Pyridine Residue into DTA is on two grounds. The first ground is that Pyridine Residue is the residue of Chemical Industry falling under Heading No.38256100, which is restricted for import and that since the clearances by 100% EOU into DTA are to be treated as import into India, these clearances would not be in ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
