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2016 (3) TMI 846 - CESTAT NEW DELHI

2016 (3) TMI 846 - CESTAT NEW DELHI - 2016 (343) E.L.T. 803 (Tri. - Del.) - 100% EOU - Liability in terms of condition no.7 of notification no.53/97-Cus dated 3.6.1997 - Held that:- Hon’ble Supreme Court in Indian Aluminium Co. Ltd. (2006 (9) TMI 6 - SUPREME COURT OF INDIA) held that though dross and skimming do arise during the process of manufacture but these are not manufactured products. An article is not exigible to tax only because it may have some saleable value. The Supreme Court conclud .....

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is that these are not manufactured items. Hence, on this ground alone, the present impugned order confirming the duty demand will not survive. We noticed further that the various demands issued to the appellants did not specify the legal basis or reason for such demand of customs duties. They indicated that in the event of the impugned goods were found to be non-excisable, then customs duty is payable. Apparently, such conditional and provisional demands are not legally sustainable. - Decided in .....

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Condition no.7 of the said notification stipules that the imported goods are to be used for the purpose of manufacture of articles within 100% EOU and such articles (including reject, waste and scrap arising in the course of manufacture of such article) if no exported out of India, are allowed to be sold in India in accordance with EXIM Policy on payment of duty of excise leviable thereon under Section 3 of the Central Excise Act, 1944 or where such articles (including reject, waste and scrap m .....

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ppropriate customs duty on imported zinc used for production of above said goods (scaling/dross/ash). These demands were to recover customs duty in the event of the above goods being treated as non-excisable. The issue was adjudicated by the original authority who vide order dated 22.06.2005 confirmed the demands. On appeal, the ld. Commissioner (Appeals) vide the impugned order dated 26.10.2005 substantially upheld the original order. Aggrieved by this, the appellants are in appeal before us. 2 .....

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Ram Agro Chemicals (P) Ltd. b) the demands are overlapping with no clear allegation as to what type of duty is being demanded due to which legal provision. c) If at all, only duty of customs payable on zinc contained in dross, etc. can only be demanded not on the whole value of such dross, etc. This is clear from the amendment carried out in the said condition with effect from 18.05.2001. The said amendment is only clarificatory applicable for all the periods. d) There are serious inconsistencie .....

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the impugned order. He submitted that the zinc scaling, dross, etc. are cleared on valuable consideration. These have clear marketability and hence are excisable goods. 4. Heard both the sides. Examined appeal records. 5. The point for decision is the appellants liability in terms of condition no.7 of notification no.53/97-Cus dated 3.6.1997. The admitted facts are that the appellants imported zinc without payment of customs duty in terms of said notification. They have used the zinc for the i .....

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