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M/s. Molex (India) Private Ltd. Versus Commissioner of Central Excise

2016 (9) TMI 39 - CESTAT BANGALORE

Invokation of extended period of limitation - Demand of duty alongwith interest and penalty - appellant procured certain inputs from 100% EOU - credit of duty availed in excess of additional duty leviable under Section 3 of the Customs Tariff Act equivalent to duty of excise specified in Clauses (i) (ii) (iii) (iv) (v) (vi) (via) of Rule 3(1) of CCR, 2004 is irregular. - Held that:- the duty charged by an EOU is a duty of excise charged by 100% EOU and the amount of duty charged is one singl .....

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ting the measure of such excise duty was also to include element of customs duties but the entire duty paid on the invoices will have to be considered as Central Excise duty paid under Section 3(1) of Central Excise Act. Therefore keeping in view the various judgments cited which squarely covers the case of the appellant in his favour, the impugned order is set aside. - Decided in favour of appellant - E/3090/2012 & E/25430/2013 - Final Order No. 20677-20678 / 2016 - Dated:- 30-8-2016 - Shri S. .....

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ic connectors, parts of connectors, electronic connector harness and other IT products classifiable under Chapter 85 of the First Schedule to the Central Excise Tariff Act, 1985. The appellant procures duty paid inputs, capital goods and input services for use in the manufacture of dutiable final product and also avail CENVAT credit of duty paid on purchase of inputs and capital goods and service tax paid on input services. During the period August 2007 to January 2010, appellant procured certai .....

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nd thereafter a show-cause notice was issued to the appellant on the allegation that the duty paid by the EOU under Section 3 of Central Excise Act, read with Sl. No.1 of the Notification No.23/2003-CE is not relevant to the appellant as credit in full and that the availment of credit by the appellant is not in accordance with the provisions of CENVAT Credit Rules, 2004 (CCR, 2004). The extended period was also invoked. The allegation in the show-cause notice was controverted by the appellant by .....

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ment of duty and hence extended period of limitation was not invokable. The learned Commissioner (A) vide the impugned order rejected the appeal of the appellant on the ground that the credit of duty availed in excess of additional duty leviable under Section 3 of the Customs Tariff Act equivalent to duty of excise specified in Clauses (i) (ii) (iii) (iv) (v) (vi) (via) of Rule 3(1) of CCR, 2004 is irregular and also justified the invoking of extended period. Aggrieved by the said order, the app .....

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would be equivalent to the duty paid on import of goods. The measure of computation of duty does not alter its nature of being a duty of excise. He further submitted that in the impugned order at para 5 and the adjudicating authority at para 13.7 have accepted the fact that the duty discharged by an EOU is a duty of excise but have proceeded to restrict the credit of the amount which is equivalent to basic custom duty. He further submitted that once it is accepted that the duty paid is a duty o .....

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e Larger Bench of the Tribunal in para 16 of the aforesaid decision have held as follows: 16. Notification No.2/95-C.E., dated 4.1.95 provides that the goods manufactured and cleared by a 100% EOU to DTA will be exempted from so much of duty of excise as is in excess of the amount calculated at the rate of 50% of each of duty of customs leviable read with any other notification for the time being in force on the like goods produced or manufactured outside India, if imported into India, provided .....

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customs leviable on goods cleared by 100% EOU is more than the duty of excise leviable on like goods, a 100% EOU, has to pay more duty. The Revenue want to restrict the availment of Modvat credit to the components of additional duty of customs paid under Section 3 of the Customs Tariff Act, by bringing the fiction that 100% EOU is a place which is not in India and the sale there from within India is akin to import into India. We do not find any substance in this view of the Revenue. The clearanc .....

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garded as import, then the duty has to be charged under Section 12 of the Customs Act, read with Section 3 of the Customs Tariff Act. The Revenue, it seems is confusing the measure of the tax with the nature of the tax. The nature of the duty levied on the goods from 100% EOU is excise duty and nothing else, whereas for determining the quantum of duty the measure adopted is duty leviable under Customs Act, as held by the Supreme Court in many cases referred to above. The method adopted by the la .....

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ty of excise and not customs duty. 2.1 He further submitted that Rule 3(1) of CCR, 2004 does not allow CENVAT credit of basic custom duty which is chargeable under Section 12 of Customs Act, 1962; whereas in the present case the duty charged by EOU is a duty of excise charged under Section 3(1) of Central Excise Act. Further there is no restriction under Rule 3(1) of CCR, 2004 on availment of CENVAT credit of duty charged under Section 3(1) of CCR, 2004. Learned counsel admitted that there is a .....

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iso cannot enlarge the scope of the main Section and no CENVAT credit of duty other than paid under First Schedule to Central Excise Tariff Act, 1985, is eligible. If the view put forth by the Revenue is accepted than under proviso to Section 3(1) no duty more than the duty of excise leviable under the First Schedule to Central Excise Act can be recovered from a 100% EOU. Revenue can take not one stand while recovering duties and take another stand once it comes to taking of CENVAT credit. It is .....

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alculating the measureof such excise duty also include elements of customs duties. Therefore, the entire duty paid on the invoices will have to be considered as Central Excise duty paid under Section 3(1) of the Central Excise Act, 1944. It is not the case of the Revenue in these proceedings that CENVAT credit of the excise duty paid by the 100% EOU was required to be reduced under any other provisions of the Cenvat Credit Rules, 2004. 3. On the other hand, learned AR reiterated the findings of .....

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duty of excise to be called the Central Value Added Tax (CENVAT)] on all excisable goods (excluding goods produced or manufactured in special economic zones) which are produced or manufactured in India as, and at the rates, set forth in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986); (b) a special duty of excise, in addition to the duty of excise specified in clause (a) above, on excisable goods excluding goods produced or manufactured in special economic zones specified i .....

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e 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). .....

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