9911796707
TMI Blog2023 (6) TMI 1106X X X X Extracts X X X X X X X X Extracts X X X X ..... 03-CE dated 31.03.2003 and 52/2003 dated 31.03.2003, the assessee by import as well as indigenously procured inputs, capital goods without payment of duty for manufacture of final products. 2.2 On fulfilment of Export obligation, they applied for permission to exit from the EOU scheme, vide letters dated 10.02.2011, 24.02.2011 and 17.03.2011. The Development Coimmisioner by his letter dated 24.03.2011 granted permission to exit in principle upon payment of requisite duties on all imported and indigenously procured capital goods, inputs, consumables, including finished stock. The appellant then paid all duties including duties on semi-finished goods and finished goods. On the basis of no objection and final exit order issued by the Development Commissioner the appellant exited the EOU scheme and got converted into a DTA unit, in the same premises and transferred all capital goods, raw materials, semi-finished goods and finished goods to the DTA unit. From the DTA unit, the finished goods were exported and the semi-finished goods were fully processed and also exported on payment of duty under claim of rebate of duty in terms of Rule 18 of CER, 2002. 2.3 While examining the rebate c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id on semi-finished goods and finished goods. Aggrieved by such order the appellant has filed appeal no. E/42186/2013. 4. The learned Counsel Shri S. Durairaj appeared and argued for the appellant. At the time of de-bonding, appellants paid duties on the stock of finished goods/ semi-finished goods as on 23.05.2011 as per proviso to Section 3(1) of Central Excise Act, 1944 by availing the benefits of Sl.No: 1, 2 and 3 of notification 23/2003-CE dated 31.03.2003. Sl.No:1 is the exemption from 4% SAD, when VAT is not exempted for DTA clearances. Sl.No:2 is the exemption for 50% customs duty [BCD], when the goods are manufactured out of indigenous materials and cleared in DTA [5/15%]. After assessment by the jurisdictional authorities, the no due certificate was issued. Subsequently, the present Show Cause Notice has been issued alleging that the exemption under notification 23/2003-CE is applicable only for DTA clearances as per para 6.8 of FTP and not for payment of duties while de-bonding as per para 6.18 of FTP. 4.1 Apart from this while in the SCN, profit margin of 20%, freight amount of 20%, insurance amount of 1.175% and landing charges of 1% were also proposed to be added to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I 937 IPCA Laboratories Ltd Vs. CCE - 2022(11) TMI 336-CESTAT dated 04.11.2022, 42/2001-CE (NT) dated 26.06.2001, 43/2001-CE(NT) 26.06.2001 and 19/2004-CE(NT) dated 06.09.2004. 4.4 In regard to the duty demand on finished goods it is submitted by the learned Counsel that the adjudicating authority has taken the view that, the phrase 'brought to any other place in India' in proviso to Section 3(1) covers both 'de-bonding‟ and 'DTA clearances‟. The same phrase in notification 23/2003-CE covers only DTA clearances and not de-bonding. That, therefore, assessee has to pay duty as per proviso to Section 3(1) [Aggregate of all customs duties] without availing benefit of Notification No. 23/2003- CE. The adjudicating authority has relied on the decision of Century Yarn Vs CCE - 2011 (270) ELT 554 and also the Circular 1/2004-Cus dated 05.01.2004. 4.5 The learned Counsel pointed out that the decision of SIV Industries (supra) was rendered, when the phrase in clause (b)(ii) of proviso to Section 3(1) earlier read as "allowed to be sold in India'. In the case of SIV Industries the Hon'ble Apex Court held that the assessment of the finished goods lying in stock on the date of de- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e approval is granted to de-bond.' 4.5.2 It is argued by the learned Counsel that in view of the above reasons, the decision of Century Yarn and the Circular dated 05.01.2004 cannot be relied since these are contrary to the decision of the Hon‟ble Supreme Court in the case of SIV Industries (supra) and Universal Ferro and Allied Chemicals Ltd (supra). It is submitted by the learned Counsel that the levy at the time of de-bonding has to be under Section 3(1) and not under proviso to Section 3(1) because, 'brought to any other place in India‟ does not cover de-bonding, especially, when it is established that the goods were exported. 4.5.3 Countering the grounds in the appeal filed by the Department which is an appeal to include the freight charges, insurance, etc., in assessable value of finished goods, and semi-finished goods while de-bonding to DTA, the learned Counsel submitted that since proviso to Section 3(1) is not applicable, the valuation has to be done only under Sec 4 of Central Excise Act, 1944 and not under Section 14 of the Customs Act, 1962. That therefore the appeal filed by the department may be dismissed. 4.5.4 In regard to the allegation that credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2018 (8) TMI 1944 CESTAT Chennai. By judicial discipline following the above decision, we hold that the demand of duty on semi-finished goods is not justified and requires to be set aside, which we hereby do. 10. The duty demand on finished goods was defended by the learned Counsel by submitting that the goods having been exported the demand cannot sustain. It is an admitted fact, in the Show Cause Notice as well as the OIO that these goods have been exported. At the time of such export assessee has paid duty as per provisions of Section 3(1) of the Central Excise Act, 1944 on the export clearances. The Tribunal in the case of M/s. Bhati & Company Vs CCE, 2019 (9) TMI 1500 CESTAT New Delhi had set aside the demand of duty raised invoking proviso to Section 3(1) of the Central Excise Act without availment of Notification No. 23/2003. It was observed therein that the finished goods having been exported the duty demand cannot sustain. We do not find any grounds to take a different view. The goods having been exported, the differential duty demand cannot sustain. Ordered accordingly. It needs to be mentioned that though initially, the appellant had contended that the duty on semi-fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pointed out that in Para 22.1 of the Order-in-Original, the adjudicating authority has discussed the reasons for disallowing the credit on semi-finished goods and finished goods. It is stated that the assessee has paid duty at the time of de-bonding by wrongly availing the concessional rate of duty at Sl. No. 2 and Sl. No. 3 of Notification No. 23/2003-CE. Assessee ought to have paid duty under proviso to Section 3(1) of Central Excise Act, 1944. Without availing the notification benefit. The credit has been denied for this reason. The relevant discussion is as under: "23.5 In the case of the duty paid by an EOU on the goods manufactured by them, duty has to be paid as per the proviso to section 3(1) of CEA (De-bonding) or the proviso read with Notification No. 23/2003 (DTA Sales) and hence the levy is under the CEA and the duty so paid is duty of excise. However, the rate of duty is not as specified in the first schedule to Central Excise Tariff Act but equal to the aggregate of customs duties leviable under the Customs Act 1962. In view of the absence of one of the ingredients, the credit of duty paid by an EOU at the time of de-bonding cannot be allowed under rule 3(1)(i) of C ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
