TaxTMI 
TaxTMI 
2023 (10) TMI 1297
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....o.4/2006-CE dated 01.03.2006 as amended. 2.1 The Revenue is of the view that the said Notifications were issued under Section 5A (1) of the Central Excise Act, 1944. The proviso to the said Section provides that under exemption of Section 5A shall not apply to excisable goods, which are produced or manufactured by a 100% EOU and brought to any place in India. Therefore, the appellant is not eligible for those exemption Notifications. 2.2 The proceedings were initiated against the appellants by issuing show-cause notices to demand differential duty along with interest and to impose penalties on the appellants. 2.3 Against the said order, the appellants are before us. 3. The ld.Counsel for the appellants submits that the duty payable by 100% EOU is covered by the provisions of Section 3(1)(b)(ii) of the Central Excise Act, 1944. In view of the said provisions, duty is to be levied and collected from a 100% EOU would the duty of Customs payable as if the goods produced or manufactured outside India have been imported into India. This is the basic charging section of duty leviable on a 100% EOU when clearing the goods to DTA. The Notification No.23/2003-CE dated 31.03.2003 as amend....
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....be liable to pay duty based on applicable Customs duty and additional Customs duty in terms of Notification vide Sl.No.32 of Notification No.4/2006 on Sulphuric Acid subject to the condition No.2 of the Annexure to the said Notification. There is no allegation in this case regarding involvement to Condition No.2. Therefore, the question of denying benefit of exemption does not arise. 3.4 He further submits that a letter was issued by the appellants' sister unit seeking a guidelines mentioned in para 4 of the letter 02.04.2008 issued by the Chief Commissioner of Central Excise, Bombay. In response to the said letter, the Superintendent of Central Excise, Kalyan, has intimated to follow the proper CT-2 Procedure. 3.5 He also refers a Circular No.4/2008-09 dated 22.04.2008 clarifying the position and in the said Circular, it has been made clear that the Notification No.2/2008-CE dated 01.03.2008 would be applicable while making clearance of the goods from EOU to DTA and the nil rate of duty would be applicable in case of clearance of Spent Sulphuric Acid to fertilizer companies. 3.6 It is also submitted that the adjudicating authority in spite of specific statutory provisions mis-i....
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....ken 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.). (b) Only the effective rate of duty applicable to the goods cleared by the domestic unit can be applied for computing the CVD payable. The respondent's impugned actions are contrary to the settled position of law on the issue by the Supreme Court in Hyderabad Industries Limited (supra) and Thermax Private Limited (supra), where the Hon'ble Supreme Court has observed that while calculating CVD it has to be assumed that the goods were manufactured in India and the applicable rate of duty to such manufactured goods has to be applied to the imported goods. The effective rate of excise duties for a unit located in the specified area mentioned in 50/2003-C.E. is Nil and it is this rate alone which can be applied for the purpose of calculating 'CVD' in te....
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.... of Customs leviable under the Customs Act, 1962 which would be considered appropriate for payment as excise duty by 100% 'EOU'. (iii) It is also evident from the impugned order dated 17-3-2011 of 'DGEP' that the duties of customs leviable on the goods imported into India are as under :- (a) Customs duty under Section 12 of the Customs Act, 1962 (b) Additional duty of customs under Section 3(1) of the Customs Tariff Act, 1975. (c) Special Additional Duty etc. The basic Customs duty under Section 12 of the Customs Act, 1962 have already been paid by the petitioners on effecting clearances to DTA and thereby discharging one of the their liabilities required for working out the aggregate duties of Customs under Section 3 of the 'Act'. The provisions of Section 3(1) of the Customs Tariff Act, 1975 requires that for determining the said duties of Customs, it has to be equal to the excise duty for the time being leviable on a like article if produced or manufactured in India. The expression "the excise duty for time being leviable on a like article if produced or manufactured in India" means the excise duty for the time being in force which would be leviable on a like a....
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....mmencement of commercial production to the new industries and thereby also declaring state of Himachal Pradesh being the special category state including State of 'Uttranchal'. In view of such background of the said declaration, the respondents have also not denied that Notification No. 50/2003-C.E., dated 10-6-2003 has been issued to serve the basic objective of the new industrial policy for the State of Himachal Pradesh introduced by the Ministry of Commerce on 7-1-2003. The petitioners in support of their claim that 100% 'EOU' are included in New Industrial Policy of Ministry of Commerce, Government of India has also relied on the state industrial policy of Government of Himachal Pradesh and the Rules regarding grant of incentives, concessions and facilities to industrial units in Himachal Pradesh, 2004. Undisputedly, such policy of state and the Rules framed by the state in the year 2004 were in compliance of O.M. dated 7-1-2003. 24. For calculation of excise duty payable by a 100% 'EOU', the provisions of Section 5A of the Central Excise Act had been so enacted so that the provisions of Section 3 of the 'Act' do not become redundant. It is for such reason that the expressio....
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.... Customs Tariff Act by considering effective rate of excise duty provided under the Central Excise exemption notification and by doing so it is only discharging his liability for payment of Customs duty. 27. The plea of the respondent/Union of India that excise exemption notification is not applicable for calculating the Additional Duty of Customs, otherwise cannot be sustained particularly when the clarification letters dated 18-1-2008, 6-4- 2009, 24-9-2010 and even order dated 17-3-2011 does not dispute that for calculating Additional Duty of Customs under Section 3(1) of the Customs Tariff Act, 1975, Central Excise exemption notification, unconditionally or conditionally, on satisfaction of the conditions can be considered for calculating Additional Duty of Customs. In the present case the petitioners undisputedly comply with all the conditions laid down in Area based exemption notification of Central Excise and therefore, where there is no bar in such notification for 100% 'EOU' to take benefit. There is no justification or logic to stop such free flow, so long, as it is not disputed that State of Himachal Pradesh is integral part of India, wherein the specified areas are lo....
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.... duty under Section 12 of the Customs Act, 1962, whereas, other manufacturers while functioning in the State of H.P. though are claiming benefits of area base exemption but are not paying such Customs duty. The Central Government has consciously and intentionally provided the tax incentive benefit including 100% excise duty exemption to the special category State of Himachal Pradesh, as such, any disparity with other manufacturer of India, located in different parts, shall not be created." 9. In view of the above decision, which is applicable to the facts of this case, the charging section for duty on DTA clearance is under the provisions of Section 3(1)(b)(ii) of the Central Excise Act, 1944 and as per the said provisions, the duty is to be levied and collected from a 100% EOU, would be the duty of Customs payable if the goods produced and manufactured outside India and the same have been imported into India. This is the basic charging section of duty leviable on a 100% EOU when clearing the goods to DTA. As per the said provisions, the duty of excise shall be levied and collected on any excisable goods, which are produced and manufactured by a 100% EOU and brought to any other p....