TMI Blog2023 (3) TMI 1426X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Notification No. 01/2011-C.E. dated 01.03.2011. In the Show Cause Notice it is stated that this Notification is not meant for EOU as there is no specific exemption provided as required under proviso to Section 5A (1) of the Act. Surprisingly, the Adjudicating Authority has decided to quantify the demand of duty as per Notification No. 02/2011 dated 01.03.2011. The concessional rate of duty as per Notification 01/2011-C.E. is 1% whereas the concessional rate of duty as per Notification No. 02/2011-C.E. is 5%. There is absolutely no whisper in the Show Cause Notice about Notification No.02/2011. The Department cannot then quantify and confirm the demand as per Notification No. 02/2011-C.E at a later stage. This finding is indeed beyond the scope of Show Cause Notice. For this reason itself, the Order-in-Original is vitiated and the demand raised therein cannot sustain. The demand confirmed by denying the benefit of Notification No.01/2011 and by applying Notification No. 02/2011 is not justified and requires to be set aside - The issue is answered in favour of assessee and against Revenue. Cess included while calculating the demand of duty confirmed by the department - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rms of Central Excise Rules 2002. The Notification No. 23/2003-C.E. issued under Section 5A of the Act, envisages that all goods manufactured in a 100% EOU out of imported raw materials and cleared to DTA attracts Excise duty equivalent to 50% of Customs Duty. According to Department, In terms of proviso to subsection (1) of Section 5A of the C.E. Act, an exemption Notification issued under the Act, shall apply to excisable goods which are produced or manufactured by a 100% EOU and brought to any place in India, only if it is specifically mentioned in the Notification that it applies to 100% EOU. As no such specific mention is made in Notification No. 01/2011-C.E. dated 01.03.2011, the appellant has wrongly availed the benefit and paid less CVD of 1% on the DTA clearances. Thus due to wrong availment of benefit of Notification No.01/2011-C.E. the appellant short paid the CVD for the period March 2011 to December 2011. Show Cause Notice dated 13.02.2012 was issued proposing to recover the short paid duty along with interest and for imposing penalties. After due process of law, the original authority vide Order-In-Original No.03/CE/COMMR/2013 dated 14.03.2013 confirmed an amount of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 02/2011-C.E. has to be applied. The reliance placed on this Board Circular is highly misplaced. The said Circular applies to imports, whereas, in the assessee s case, the duty demand is on the DTA clearances made by them, and not on imports. The basis of the finding that the appellant has to pay duty @ 5% in terms of Notification No.02/2011 is incorrect. 8. The Learned Counsel urged that the finding of the Commissioner that appellant has not fulfilled the condition of the Notification No. 01/2011-C.E. for the reason that assessee has not availed any CENVAT Credit of duty/tax paid on inputs and input services is totally erroneous. The relevant part of Notification No. 01/2011-C.E. dated 01.03.2011 was adverted to which is reproduced as under: - Notification No. 1/2011-C.E., dated 1-3-2011 Effective rate of duty of 1% on specified goods when no Cenvat credit availed on inputs or input services In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the excisable goods of the description specifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. The second issue is with regard to Cess. While calculating the duty, the Department has added Cess three times. According to assessee, since the Education Cess and Secondary and Higher Education Cess which is charged as surcharge are basically Central excise duty, and since while calculating the aggregate of duties of Customs, Education Cess and Secondary and Higher Education Cess @ 2% and 1% respectively is already added to the basic Customs duty and additional Customs duty there is no need to charge the Education Cess and Secondary and Higher Education Cess once again on the Central excise duty. It is submitted that the said issue is settled by the decision of larger bench in the case of Kumar Arch Tech Pvt. Ltd. Vs Commissioner of Central Excise, Jaipur-II 2013 (290) ELT 372 (Tri.-LB) The Learned Counsel prayed that the assessee s appeal may be allowed. 13. The Learned Authorized Representative for the Department reiterated the grounds of appeal. It is submitted that for DTA clearances the assessee has to pay duty adopting CVD at tariff rate of 16% and not concessional rate in terms of Notification No.02/2011. 14. Heard both sides. 15. On base perusal of the Order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the DTA, unless and otherwise there is an unconditional notification prescribing concessional rate of duty, they are liable to pay the Tariff Rate. When the above clarificatory circular is read in consonance with Notification No. 89/1982 Cus dated 25.03.1982 extracted above, it is clear that only if there is an unconditional exemption available, goods manufactured by 100 % EOUs are eligible for claiming the benefit of such notification. Corollary is that, if there exists an unconditional exemption notification, 100 % EOUs can claim the benefit of such notification for clearing the goods produced or manufactured to DTA. 15. Further, as per para 20 of Chapter 22 of the Customs Manual, it is clearly mentioned that in terms of section 3 of the Central Excise Act 1944, the excise duty leviable on goods manufactured in an EOU / EPZ unit and cleared into Domestic Tariff Area is the amount equal to the customs duty levlable as per Section 12 of the Customs Act 1962 or under any other law for the time being in force on like goods produced or manufactured outside India, if Imported Into India. Thus the measure of excise duty leviable on goods manufactured In EOU / EPZS is worked out e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... einafter referred to as CEGAT ), even the CEGAT has affirmed the order of the authorities below and dismissed the appeal. 3. Entry/Serial No. 122 in the Notification No. 6/2002 reads as under - S. No. Chapter or Heading No. or sub-heading No. Description of goods Rate under the First Schedule Rate under the Second Schedule Condition No. 122 5402.10 5402.41 5402.49 5402.51 5402.59 5402.61 or 5402.69 Nylon filament yarn or polypropylene multifilament yarn of 210 deniers with tolerance of 6 per cent. Nil - 20 4. As per the aforesaid entry, the rate of duty is nil. Condition No. 20 of this Notification, which was relied upon by the authorities below in denying the exemption from payment of CVD, is to the following effect : 20. If no credit under Rule 3 or Rule 11 of the Cenvat Credit Rules, 2002, has been taken in respect of the inputs or capital goods used in the manufacture of these goods. 5. The aforesaid c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for levy of an additional duty. The duty is, in other words, in addition to the Customs duty leviable under Section 12 of the Customs Act read with Section 2 of the Tariff Act. The explanation to Section 3 has two limbs. The first limb clarifies that the duty chargeable under Section 3(1) would be the Excise duty for the time being leviable on a like article if produced or manufactured in India. The condition precedent for levy of additional duty thus contemplated by the explanation deals with the situation where a like article is not so produced or manufactured . The use of the word so implies that the production or manufacture referred to in the second limb is relatable to the use of that expression in the first limb which is of a like article being produced or manufactured in India. The words if produced or manufactured in India do not mean that the like article should be actually produced or manufactured in India. As per the explanation if an imported article is one which has been manufactured or produced, then it must be presumed, for the purpose of Section 3(1), that such an article can likewise be manufactured or produced in India. For the purpose of attracting additi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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