TMI Blog2016 (4) TMI 771X X X X Extracts X X X X X X X X Extracts X X X X ..... and the amendment brought in 2001 has not materially changed the situation. The Foreign Trade Policy apparently deals with the goods which are allowed to be sold in India by an E.O.U. in terms of the policy and the same is applicable to a functioning E.O.U. It cannot be said that such expression in the Foreign Trade Policy applies to the finished goods lying in stock when the E.O.U. intents to exit the scheme itself. It is noticed that the final debonding and conversion of E.O.U. to a D.T.A. Unit is legally permissible only on discharging all the duty liabilities on capital goods, raw-materials, finished goods etc. lying in the E.O.U. In such a situation, it is not legally tenable to argue that the rate of duty applicable to a normal Centra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to pay the duty liability on raw-materials, consumables, capital goods and the finished goods the present dispute is relating to quantum of duty payable on finished goods lying in stock at the time of debonding of the E.O.U. The appellant assessee calculated the duty liability on the finished goods after availing the benefit of exemption Notification No.23/2003-CE dated 31.03.2003. A show cause notice dated 29.08.2006 was issued to the appellant assessee to demand a differential duty of ₹ 88,69,040/- by denying the exemption under the above said Notification. 2. The case was adjudicated and the ld. Commissioner vide the impugned order confirmed the demand with appropriate interest. 3. Aggrieved by this the appellant assessee fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed goods in an E.O.U. at the time of debonding is not available. This has already been conceded by the appellant/ assessee. As the said Notification applies only to functioning E.O.U. and not in respect of debonding E.O.U. (b) The decision of the Hon ble Supreme Court in Siv Industries (supra) is not applicable to the present case. The expression allowed to be sold in India appearing in proviso to Section 3 (1) was the focus of discussion, analysis and decision by a Hon ble Supreme Court. After the decision of Hon ble Supreme Court the issue was taken note of by the C.B.E.C and on 11.05.2001 vide Section 120 of Finance Act, 2001 the wordings of proviso to Section 3 (1) were suitably amended. The scope of the amendment was also explained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they are liable to duty on the finished goods only in terms of main Section 3 (1), in other words, as if the goods are manufactured and cleared by a normal Central Excise Unit. The case of the Revenue is that the duty calculation has to be in terms of proviso to Section 3 (1) which is applicable to goods manufactured in 100% E.O.U. 9. It is an admitted fact that the finished goods which are lying in stock are manufactured by an E.O.U. The duty liability there-upon has to be discharged as a pre-condition for final debonding of the unit which will convert them to a normal domestic Central Excise Unit. The appellant/ assessee heavily relied on the decision of the Hon ble Supreme Court in Siv Industreis (supra). We have perused the said deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Section 3 (i) cannot be restrictively interpreted to apply to such finished goods, which are only permitted to be sold in India by the Development Commissioner. It is clear that the scope of the term as per the revised proviso to Section 3 (i) is much wider and not bound by any criteria of permission to sell in India. 10. The Tribunal in Centuary Yarn (supra) examined this issue in detail. The Tribunal also took note of the Larger Bench decision in the case of Himalaya International Ltd. 2003 (154) E.L.T. 580 (Tri.- L.B.) and observed as below:- 10. In both the decisions, the Larger Benches have clearly distinguished the decision of the Apex Court in Siv Industries Ltd. case. Indeed the issue for consideration before the Apex Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities below on detailed discussions about applicability of the proviso the Section 3(1) of the said Act in the facts of the case have clearly applied the provisions of law as they are applicable to the facts of the case and therefore, we do not find any infirmity in the impugned order in that regard. Commissioner (Appeals) was justified in observing that the concessional duty under the said exemption Notification would apply only in a situation where the goods are brought to DTA under specified paragraphs (a), (d), (e) and (g) of the Foreign Trade Policy which is not the case when the unit exits from EOU scheme to DTA unit. The benefit under the said Notification is restricted to the sale allowed to be sold from EOU to DTA and not in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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