TMI Blog2018 (6) TMI 908X X X X Extracts X X X X X X X X Extracts X X X X ..... dismissed - decided against Revenue. - E/133/2011, E/335/2011 - FINAL ORDER No. 41711-41712/2018 - Dated:- 10-5-2018 - Ms. Sulekha Beevi C.S. Member (Judicial) and Shri Madhu Mohan Damodhar, Member (Technical) Shri R.Subramanian, AC (AR) For the Appellant Ms. D.Naveena, Advocate For the Respondent ORDER The issue in these appeals being the same, they were heard together and disposed by this common order. The facts in Appeal No.133/2011 is narrated for reference. The respondents are manufacturers of Terry Towels or Terry Fabrics of cotton. As per para 6.8 of Foreign Trade Policy, they are allowed to clear 50% of FOB value of exports to DTA. The rate of duty for clearances made to DTA is governed by notification No.23/2003 CE dt.31.3.2003 and the duty has to be paid as per the calculation mentioned in the said notification. It was noticed that respondents cleared the Terry Towels to DTA by calculating the additional duty of excise (CVD) at the effective rate of 4% adv. As under notification No.29/2004 CE dt.9.7.2004 issued under Section 5A of Central Excise Act, 1944. Department was of the view that appellants cannot avail the concessional duty as under Noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... export-oriented undertaking shall have the same meanings as in Explanation 2 to sub-section (1) of section 3 . 5.1 Undisputedly respondents are 100% EOU. The argument of the department is that as per Section 5A unless a notification specifically mentions that the same is applicable to EOU, the respondents cannot avail the benefit of such notification. Section 5A has to be read alongwith notification 23/2003 which grants exemption to DTA clearances made by EOU. Sl.No.2 of this notification is reproduced for better understanding. Sr.No. Chapter or heading No. or subheading No. Description of Goods Amount of Duty Conditions (1) (2) (3) (4) (5) 2. Any Chapter All goods In excess of the amount equal to fifty per cent. of the duty leviable under section 3 of the Central Excise Act : Provided that the duty payable in accordance with this notification in respect of the said goods shall not be less than the duty of excise leviable on the like good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emption for clearances to DTA as per notification 23/2003. 5.3 In UOI vs Plastic Processors 2005 (186) ELT 427 (S.C.) , the hon ble Apex Court maintained the decision of the Hon ble Delhi High Court that CVD was payable at effective rates and not at tariff rates on clearances made by 100% EOU into DTA. In Lucky Star International vs UOI , a similar issue was analysed by the Hon ble High Court of Gujarat and the Circular No.38/2000 Cus dt.10/5/2000 was quashed. The decision was maintained by the Hon ble Apex Court by dismissing the SLP filed by department as reported in 2002 (141) ELT 490 (S.C.) 5.4 The very same issue was considered by the Tribunal in the case of CCE, Lucknow vs Srivatsa International Ltd 2015 (326) ELT 699 (Tri.-All.) . The relevant portion is reproduced as under : 6.1 Duties of Central Excise are levied under Section 3(1) of the Central Excise Act. Duties of excise on excisable goods produced by a 100% EOU are levied under proviso to Section 3(1). This duty shall be equal to the aggregate of customs duties. While considering the aggregate of Customs duties on like goods produced or manufactured outside India if imported into India, one comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct‟ cannot be taken as a bar in calculating CVD‟ for the purpose of computing the duties payable by a 100% EOU unit while making DTA clearances, stands settled by the judgment of the Delhi High Court in the case of Plastic Processors v. Union of India - 2002 (143) E.L.T. 521 (Del.) which has expressly been upheld by the Hon‟ble Supreme Court in Union of India Others v. Plastic Processors Others - (2009) 12 SCC 747 = 2005 (186) E.L.T. A27 (S.C.). 5.5 Similar view was taken in Shanta Biotechnics Ltd (supra) . The relevant portion read as under : 7 . The issue involved in this case is whether the duty payable by the assessee respondent shall be determined exactly in the same manner as is done in respect of imported goods, as the clearances effected by the assessee respondent is a 100% export oriented. The provisions of clearances made to DTA would apply to the current case, which is mandated under provisions of Section 3(1) of the Central Excise Act, 1944. It is seen from the Order-in-Original that the Adjudicating Authority has recorded the following findings while setting aside the proceedings initiated by the Show Cause Notices. I have gone thro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed plastic materials are cleared in Domestic Tariff Area (DTA) by EOUs and EPZ units. In other words, the plastic processor EOUs/EPZ units are liable to pay, among other duties, excise duty equivalent to CVD payable on imported reprocessed plastic materials (e.g. plastic granules/agglomerates) in respect of their DTA clearances of such materials/goods. The Delhi Court relied upon the decisions of the Supreme Court in Hyderabad Industries [1999 (108) E.L.T. 321 (S.C.)] and Thermax Private Limited [1992 (61) E.L.T. 352(S.C.)] and held as under : 8. As observed in the aforesaid quoted portions by the Apex Court, for the purpose of attracting additional duty under Section 3 of the Tariff Act, on the import of a manufactured or produced article, the actual manufacture or production of a like article in India is not necessary. Said provision specifically mandates that CVD will be equal to the excise duty for the time being leviable on a like article if produced or manufactured in India. This position was also elaborated in Thermax Private Limited case (supra). 9. In essence, what has to be imagined is that importer had manufactured the goods in India and then the amount of exc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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