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TMI Blog2022 (4) TMI 988X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.1. Appellant is an EOU engaged in the manufacture of cotton yarn, etc. As per the EXIM Policy 1997-2002, EOUs were entitled to clear 25% of the value of production in DTA during the year 1998-99 and 50% of FOB value of Exports exports from 1999-2000 onwards. The Development Commissioner (DC) had permitted them to make the following DTA Sales during the year 1998-99 to 2001-02 based on the physical exports made by the appellant. Year FOB Value of Exports DTA sale Entitlement /Allowed Reference 1998-99 Nil Rs. 65.83 Lacs Advance DTA Sale permitted vide DC letter dated 8.10.98 1999-00 Rs. 278.40 Lacs Rs. 73.37 Lacs (139.20 -65.83) DC letter dated 30.8.2000 2000-01 Rs. 39.23 Lacs Rs. 19.61 Lacs DC letter dated 25.2.2002 2001-02 (Up to Sept 01) Rs. 107.95 Lacs Rs. 53.97 lacs DC letter dated 11.12.2001 Total Rs. 425.58 Lacs Rs. 212.78 Lacs 2.2 Appellant was issued with two SCNs dated 4.10.2000 and 7.2.2003 wherein it was proposed to demand differential duty of Rs. 32,87,981/- for the period 1999-2000 and 2000-2001 and Rs. 11,33,862/- for the period January to March 2002 respectively on the ground that the appellant has made excess DTA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... policy and Foreign Trade (Development & Regulations) Act by filing a Writ Petition No.20451 of 2000 before the Hon'ble High Court of Madras which was dismissed by the Court vide its order 14.11.2006. Appellant preferred a Writ Appeal No. 15/2007 before the Hon'ble High Court of Madras and the Court vide its order dated 3.7.2007 held that since the respondent Commissioner had already issued SCN the appellant is free to raise all the contentions in reply and the Commissioner shall consider all such contentions in accordance with law. 2.7. Commissioner had adjudicated the first SCN vide his Order in Original No.2/2009 dated 30.1.2009 confirmed differential duty of Rs. 30,23,254/- along with interest by holding that the appellant has made excess DTA sales and the DTA Sale Entitlement cannot be determined based on deemed exports. He also rejected the plea of time bar and imposed equal penalty under Rule 173Q of CER. 2.8 In the meanwhile, the appellant had written to the Development Commissioner (DC) vide their letter dated 22.12.2008 and requested for considering the deemed exports value for the purpose of DTA Entitlement by relying on the decision of the Hon'ble Tribunal in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ports for the purpose of determining DTA Sale entitlement at 50% and impugned orders denying the same merits to be set aside. 2.12 Hon'ble CESTAT in the case of Ginni International Ltd 2002 (139) ELT 172 (Tri-Del)) upheld the DTA Clearances determined based not only on the physical exports but also taking into account the deemed exports done and once the Development Commissioner permits such DTA sale the revenue cannot disallow the clearance. Further, in the case of Amitex Silk Mills Pvt Ltd - 2006 (194) ELT 344 (Tri Del) the identical issue was in consideration and in view of difference in opinion, the matter was referred to third member who had held similarly as held by the Apex Court in the Virlon Textiles and held that the Revenue has no reason to exclude the deemed exports while computing FOB value of Exports and the Revenue was in error in excluding the value of deemed exports. Both the above decisions of the Hon'ble Tribunal was challenged by the Revenue before the Apex Court and such appeals were dismissed by the Apex Court on 16.8.2007 by holding that the matters are squarely covered by the decision in the case of Virlon Textiles. 2.13 The appellant also wishes to place ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per the directions of the Hon'ble High Court of Madras. Appellant submits for the above reasons the above orders confirming the demand of duty of Rs. 11,33,862/- along with interest and penalty is not sustainable and merits to be set aside accordingly. 2.16. Appellant also plead for cum tax benefit in case the entire demand of duty or a portion of the same is upheld. 3. In view of the above, he prayed that the appeal may be allowed. 4.1 Ld. A.R Ms. Sridevi Taritla supported the findings in the impugned order. She explained that as per para-9.9 (b) of EXIM Policy 1997-2002, the assessee is entitled to sell the final products upto 25% of value of production into Domestic Tariff Area that was amended to 50% of FOB value of exports from 1999-2000 onwards. For this purpose, the appellant had obtained permission from the Development Commissioner, MEPZ, Chennai who is the statutory authority to determine the DTA entitlement. The goods can be sold in DTA only on payment of applicable duties. 4.2 As per para (f) of guidelines of sale of goods in DTA, the DTA sale entitlement shall accrue only after the goods are physically exported during the relevant period as intimated to the Devel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -01 was Rs. 2,78,85,457/-. After deducting the FOB value of Rs. 2,38,08,904/- from the above said amount, the balance FOB value is Rs. 40,76,553/-. For such amount, DTA entitlement at the enhanced rate of 50% FOB value for the year 1999-2000 is only Rs. 20,38,276/- whereas the actual DTA sale effected by the appellant is Rs. 1,04,33,046/- for the period 1999-00 and 2000-01 Thus, there is excess DTA sale of Rs. 83,94,770/-. The duty liability on this excess DTA sale is worked out to be Rs. 32,87,981/-. 4.6 Appellant had also cleared cotton yarn to another 100% EOU. They requested to consider the said clearances made to other EOUs as 'deemed export'. This has not been permitted by the Development Commissioner. In terms of Circular F.No.305/48/2000 FTT dated 7.4.2000 issued by CBEC, New Delhi, the deemed export cannot be considered as par with the exports made to foreign buyers and therefore such clearances were not taken into account for arriving at the entitlement for sales at concessional rate for DTA clearances. The demand confirmed is therefore legal and proper. 5. Heard both sides. 6. First issue that arises for consideration is whether the quantification of DTA sale value in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the Deemed Export? 2. This Court has issued notice on 29-1-2010 for final disposal making it returnable on 5-2-2010. An 29-1-2010 when Mr. Sanjay Sharma, full-time paid employee of the assessee was present. He informed that the authorized signatory of the assessee is not available for the week and hence the notice could not be served. Mr. Bhatt, however, submitted that issue involved in this Tax Appeal is similar to one which is involved in Tax Appeal No. 968/2008, which is being heard today. We have, therefore, considered Mr. Bhatt's submission even for this appeal too. Since Mr. A. Suryanarayan is appearing in Tax Appeal No. 968/2008, his submission on law point are considered even for this appeal. 3. It is the case of the Revenue that the Adjudicating Authority, after issuing the show cause notice and after considering the reply filed on behalf of the respondent-Assessee and after considering the submissions made by the learned Counsel appearing for the respondent-Assessee, has passed the Order-in-Original on 2-11-2001 directing the respondent-Assessee to pay an amount of Rs. 15,12,661/-, in terms of Section 11A(2) of the Central Excise Act, 1944. Another Order-in- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was affirmed by the Hon'ble Supreme Court as reported in Commissioner Vs 2015 (321) ELT A199 (SC). The Hon'ble Apex Court while dismissing the SLP relied upon their decision in the case of Virlon Textiles Mills Ltd. Vs CCE Mumbai reported in 2007 (4) SCC 440. 9. The jurisdictional High Court vide judgement dt. 14.7.2021 quoted para -7 from the judgement in the case of Virlon Textiles Mills Ltd. (supra) and directed the Tribunal to look into the applicability of the said decision with reference to the facts and circumstances of the case. 10. In the case of CCE Vs Shilpa Copper Wire Industries - 2011 (269) ELT 17 (Guj.) similar view was taken . Relevant para is reproduced as under : "14. We have heard the learned Counsel appearing for the parties and after considering their submissions, we are of the view that the issue raised by the Revenue in the present Tax Appeal is squarely covered by the decision of Amitex Silk Mills Pvt. Ltd. (supra), Commissioner of Central Excise v. Ginni International Ltd. and Sanghi Textiles Ltd. v. Commissioner of Customs & Central Excise - 2006 (206) E.L.T. 854 (Tri.- Bang.). So far as the decision of the Tribunal in the case of Amitex Silk Mills Pv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue and confirming the order of the learned Commissioner (Appeals) holding that the clearances made by one 100% EOU to another 100% EOU which are deemed exports are to be treated as physical exports for the purpose of entitling refund of unutilized Cenvat credit contemplated under the provisions of Rule 5 of the Cenvat Credit Rule, 2004. 17. We, therefore, hold that Tribunal is justified and has not substantially erred in law in dismissing the appeal of the Revenue and confirming the order of the learned Commissioner (Appeals) granting the refund of Rs. 5,21,009/-. 18. This appeal is, therefore, dismissed without any order as to costs." 11. The said decision was upheld by the Hon'ble Apex Court reported in 2018 (361) ELT A84 (SC). 12. The Tribunal in the case of Shree Rohini Enterprises - 2017 (346) ELT 461 (Tri-Ahmd.) held that value of deemed export is to be treated as export sale determined on FOB value of export. The same was confirmed by the Supreme Court reported in 2017 (346) A137 (SC). 13. From the decisions cited above, it is clear that value of deemed export have also to be included for computing (FOB) value of exports. Following the same, we are of the view that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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