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TMI Blog2008 (7) TMI 288X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 03-6-94 and beside this, had also acquired some indigenously manufacture capital goods/inputs free of Central Excise Duty under Notification No.136/94-CE. As per the 1997-2002 EXIM Policy, the 100% EOU's in floriculture, agriculture, horticulture, pisi-culture, poultry, sericulture etc. can sell up to 50% of their production in value terms to DTA, subject to achieving positive Net Foreign Exchange Earning (NFEP). The Net Foreign Exchange Earning has to be calculated each year for which a formula is prescribed. The required NFEP to be achieved by this unit was 20%. The DTA sales of excisable goods manufactured by a 100% EOU attract Central Excise Duty in terms of the Proviso to Section 3 (1) of Central Excise Act 1994. However, when the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustoms, Meerut-I, vide order-in-Original dated 18-10-01 confirmed the duty demand of Rs. 9,98,177/- against the Appellant under Section 28 (2) of Customs Act, 1962 along with interest on this duty @ 24% under Section 28AB of the Act and besides this, also imposed penalty of equal amount under Section 114A of the Act. The Additional Commissioner's order was upheld by the Commissioner of Customs (Appeals) and it is this order which is under challenge in this appeal. 2. Heard both the sides. 3. Shri J.M. Sharma, Consultant appearing on behalf of the appellant, pleaded that the flowers being non-excisable, no Central Excise Duty can be charged on the DTA clearances and that as per the provisions of para 3 (a) of Notification No. 126/94-CUS, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces had been granted to them by the Development Commissioner. (2) In terms of the provisions of Clause A of para 3 (a) of the exemption Notification No. 126/94-CUS, which was in force, during the period of dispute, in respect of DTA clearances of non-excisable goods produced or manufactured out of imported inputs, the Custom Duty on the inputs used in the manufacture or production of such goods was payable and this duty was to be an amount equal to the Custom Duty on the finished goods, as if imported, as such. Thus, para 3 (a) of the notification at that time contained a machinery provisions for determining the Custom Duty on the inputs used in the manufacture of non-excisable goods cleared to DTA. Therefore, the duty in respect of DTA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itation and conditions, as may be specified in this behalf by the Development Commissioner, on payment of duty of excise leviable thereon under Section 3 of the Central Excise and Salt Act, 1944 (1 of 1944) or where such articles (including rejects, waste and scrap material) are not excisable, on payment of Customs duty on the said goods used for the purpose of production, manufacture or packaging of such articles in an amount equal to the Customs duty leviable on such articles as if imported as such." 5.1.1 With effect from 18/05/01, by amending Notification No. 56/2001-CUS., the Notification No.126/94-CUS. was amended and the old para 3 (a) was substituted by new para 3 (a). The new para 3 (a) reads as under:- "Notwithstanding anything ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduction of non-excisable goods cleared to DTA and as per this machinery provision, the duty was to be in an amount equal to the Custom Duty chargeable on the finished goods, as if imported, as such. However, after the amendment of this Notification w.e.f. 18-5-01, the duty on the inputs used in the production of non-excisable goods cleared to the DTA was to be calculated on actual basis. The amendment to the Notification No. 126/94-CUS. w.e.f. 18-05-01 by the Notification No. 56/01 can have only prospective effect and it cannot be given retrospective effect. In view of this, during the period of dispute, customs duty on the inputs used in the production of cut-flowers cleared to DTA has to be calculated as per the provisions of the Notifi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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