9911796707
TMI Blog2023 (3) TMI 1426X X X X Extracts X X X X X X X X Extracts X X X X ..... are also clearing the goods into Domestic Tariff Area (DTA) on payment of duty in terms of Notification No. 23/2003-C.E. dated 31.03.2003. During audit of accounts, it was noticed that the assessee has wrongly calculated the duty payable by them while discharging duty at the time of clearance of goods to DTA. While calculating the CVD portion, the appellant has availed the benefit of Notification No. 01/2011-C.E. dated 01.03.2011. According to department as there is no specific mention that Notification No. 01/2011 applies to EOU, the appellant is not eligible for the benefit and has thus short paid CVD portion of the duty for clearances of goods to DTA. 3. As per Section 3(1)(ii) of the Central Excise Act. 1944, the Excise duty levied on DTA clearance shall be an amount equal to aggregate of duties of Customs, leviable under Customs Act, on like goods produced or manufactured outside India, if imported into India and payment should be made in terms 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditional Notification. The condition being that no CENVAT Credit can be availed on inputs by the assessee. As the appellant has imported the raw materials duty free, there has been no occasion to fulfill this condition. It is thus held that appellant has to pay duty as per Notification No.02/2011. 6. The Learned Counsel referred to the Show Cause Notice dated 13.02.2012 and submitted that there was no such allegation in the Show Cause Notice that the assessee has not fulfilled condition of Notification No. 01/2011-C.E. and therefore has to pay duty in terms of Notification No.02/2011 at the rate of 5%. It is submitted that the adjudicating authority has travelled beyond the Show Cause Notice to confirm the duty demand and for this reason itself the Demand requires to be set aside. 7. Further, the Commissioner has relied upon Board Circular dated 25.03.2011 which states that in the case of imports while computing CVD, the Notification No. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of Notification No. 01/2011-C.E. 10. The Learned Counsel drew support from the Judgment of Hon'ble Apex Court in the case of SRF Ltd Vs Commissioner of Customs, Chennai [2015 (318) ELT 607 (S.C)] and submitted that in the said case, the Department had denied the exemption benefit in term of Notification No. 06/2002-C.E. on the ground that assessee had not availed CENVAT Credit and that the Condition was not fulfilled. 11. The Hon'ble Apex Court held that when no CENVAT Credit is admissible, there is no question of availing the Credit or fulfilling the aforesaid condition. It was held that the assessee is entitled to exemption from payment of CVD in terms of Notification No. 06/2002. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessee to DTA. 17. It is also discussed by the Commissioner that the assessee is not eligible to avail the benefit of Notification No. 01/2011-C.E. for the reason that the condition in the said Notification has not been complied with. The Notification has already been noticed above. It is the case of the Department that the appellant has not availed CENVAT Credit of the duty paid on inputs and therefore, the benefit of the Notification No.01/2011 cannot be extended to them. The discussion by the Commissioner in the impugned order is as under: - "The sum and substance of the above clarification is that when goods manufactured or produced by a 100% EOU is cleared in 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stoms Tariff. The appellant claimed nil rate of additional duty of Customs by relying on exemption in terms of Serial No. 122 of Notification No. 6/2002-C.E., dated 1-3-2002. The Deputy Commissioner of Customs passed orders dated 12-4-2002 holding that the appellant was not entitled for exemption from payment of additional duty/Countervailing Duty (CVD) since it was not fulfilling Condition No. 20 of the aforesaid Notification. The Commissioner (Appeals) confirmed the aforesaid order of the Deputy Commissioner and dismissed the appeal of the appellant vide orders dated 12-9-2002. In further appeal to the Customs, Excise and Gold (Control) Appellate Tribunal (hereinafter 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. &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - "15. The ratio of the aforesaid judgment in Thermax Private Limited (supra) was relied upon by this Court in Hyderabad Industries Ltd. (supra) while interpreting Section 3(1) of the Tariff Act itself; albeit in somewhat different context. However, the manner in which the issue was dealt with lends support to the case of the assessee herein. In that case, the Court noted that Section 3(1) of the Tariff Act provides 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
