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M/s Auto Lilted India Ltd. Versus Commissioner of Central Excise, Jaipur

2017 (11) TMI 730 - RAJASTHAN HIGH COURT

100% EOU - Sale of goods to DTA - interpretation of statute - Whether in the facts and circumstances of the case the CESTAT being the last fact finding body was justified in drawing conclusion that appellant has taken no permission to sell the goods in DTA, when there was no need of permission as per EXIM Policy para 9.9 for the period 1997-2002? - Held that: - Taking into consideration the very object of 100% export oriented and exemption of excise duty is to have earning of foreign exchang .....

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ay Kumar Vyas, JJ. For the Appellant : Mr. Sameer Jain For the Respondent : Mr. Anuroop Singhi JUDGMENT 1. By way of this appeal, the appellant has challenged the judgment and order of the Tribunal whereby the Tribunal has allowed the appeal of the Department reversing the view taken by CIT (A) (Annex.2) dated 26.5.2005. 2. This Court while admitting the appeal, framed the following substantial question of law: Whether in the facts and circumstances of the case the CESTAT being the last fact fin .....

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tter of permission/ intent by the Development Commissioner, New Export Process Zone (NEPZ), Noida for granting 100% EOU status in lieu of fulfilling export obligations. Further with a condition to abide by the provisions of EXIM Policy from time to time. The appellant company is importing and purchasing inputs/ raw material from the indigenous market as well as for the manufacture of auto halogen lamps which are cleared for export as well as in the domestic tariff area (DTA) as per the norms giv .....

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d after recording statements u/s 14 of the Central Excise Act, wherein it was admitted that appellant has deposited the disputed amount voluntarily prior to issuance of show cause notice, but still demand u/s 11A and penalty u/s 11AC were demanded. 4. Counsel for the appellant pointed out provisions of Section 3(1) of the Central Excise Act and has taken us through the order of AO wherein the AO observed as under: (iv) The assessee have not violated the provisions of para 9.9(c) of Import & .....

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visions of Notification No. 2/95-CE dated 4.1.1995 as amended. Therefore, the assessee deposited much more duty as was required to be paid. The refund has been requested in the preceding paras. Since the assessee have deposited duty much earlier that the issue of the show cause notice, the penalty under section 11AC of the Central Excise Act, 1944 and Rule 209 of the Central Excise Rules, 1944 is not imposable. They placed reliance on the following decisions of Hon ble Tribunals:- 1. Seimen Ltd. .....

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y after the detection, no interest under section 11AB ibid. is demandable in this case. 6. Assessee s plea, that clearance of waste & scrap was in normal course and after paying the duty as per notification No. 2/95-CE dated 4.1.95, is not acceptable as they had not obtained any permission for such clearance from the Development Commissioner under sub para (a) of the 9.9 of EXIM Policy. Therefore, benefit of notification No. 2/95-CE dated 4.1.95 is not available to them. Permission of the De .....

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.99, 25.2.99 and 1.3.99 and noticed following discrepancies. a. The appellants had short paid Central Excise duty amounting to ₹ 28,546/- on waste and scrap cleared by the. b. The shortage of 13885 nos of finished Auto Halogen Bulbs valued at ₹ 4,48,743/- involving Central Excise duty amounting to ₹ 2,86,447/- c. On comparison stock register for the year 1996-97, 1997-98, 1998-99, the officers found a shortage of 9684 rejected bulbs/capsules involving duty amounting to ₹ .....

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bunal in the case of Himalya International Ltd. [2003(154)ELT 580(Tri.- LB)] has held that Export Oriented Units - Rate of duty applicable to permission f Development Commissioner- Goods produced and manufactured by 100% EOU and sold in excess of the permission granted cannot come under the Section 3(1) of the Central Excise Act 1944- so long as on 100% EOU continues as an EOU it will be within the proviso to section 3(1) ibid - Mere violation of the permission in the matter of sale to DTA will .....

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ubject to positive NFEP only. No DTA sale shall be permissible in respect of motor cars, alcoholic liquors and such other items as may e stipulated by Director General of Foreign Trade by a Public Notice issued in this behalf. 5.2 It is contended that the intimation was sent by letter dated 2.6.98 which reads as under: Office of the Assistant Commissioner Central Excise Division Jaipur(U) C.No. VIII 40/12/AC/EOU/98/5583 Dt. 2.6.98 To, The Superintendent Central Excise Range VKIA III Jaipur Sub:- .....

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216.25 Lacs on payment of the applicable duties and taxes leviable there on as per Notification 2/95 CE dt. 4.1.95 as amended vide Notification No. 4/98 CE dt. 24.4.98. Sd/- Assistant Commissioner 5.3 He contended that the said letter was not produced before the authority and under clause (b), he is entitled for the exemption and in view of intimation sent, he is not liable to take permission and pay 50% duty payment and he has paid 25%, he should be allowed exemption being 100% export oriented .....

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were allowed to be sold was not available to the respondent. There is also no substance in the contention that there is no challenge against the findings of the Commissioner (Appeals) that the benefit of the Notification No.2/95 was not available to the respondent. The impugned order of the Commissioner(Appeals) cannot, therefore, be sustained and is hereby set-aside and the order of the adjudication authority stands restored. 5.5. He also contended that exemption under the notification shall no .....

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f such goods being cleared under paragraph 6.8 of the Export and Import Policy, for home consumption from the unit does not exceed 50% of the free on board value of exports made during the year (starting from 1st April of the year and ending with 31st March of next year) by the said unit; and (c) The balance of the production of the goods which are similar to such goods under clearance for home consumption, is exported out of India or disposed of in terms of paragraph 6.9 of the Export and Impor .....

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