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2016 (9) TMI 39 - CESTAT BANGALORE

2016 (9) TMI 39 - CESTAT BANGALORE - 2016 (341) E.L.T. 463 (Tri. - Bang.) - 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 du .....

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nto basic custom duty and education cess. Though the method used for calculating 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/25 .....

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sent case are that the appellant is engaged in the manufacturers of electronic 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 servic .....

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he Department, the objection was raised which was replied by the appellant and 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. .....

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y have alleged that there is no suppression of fact with intent to evade payment 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 jus .....

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at the levy of excise duty on goods manufactured by an EOU and sold in India 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. .....

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ner of Central Excise vs. H. K. Moulders: 2010-TIOL-908-HC-AHM-CX wherein the 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 goo .....

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goods, manufactured outside 100% EOU. However, if the aggregate of duty of 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 I .....

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is levied and not the customs duty under the Customs Act. If it is to be regarded 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 .....

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., cannot change the legal position that the duty levied on 100% EOU is a duty 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 charge .....

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nue has relied upon the case law of the Apex Court to the effect that a proviso 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 d .....

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nvoices show the same to be Central Excise duty though the method used for calculating 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 Cred .....

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shall be levied and collected in such manner as may be prescribed, - (a) a 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 ex .....

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l be an amount equal to the aggregate of the duties of customs which would be 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 C .....

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