9911796707
TMI Blog2025 (3) TMI 740X X X X Extracts X X X X X X X X Extracts X X X X ..... A(1) of the Central Excise Act, 1944 alongwith interest as per provisions of Section 11AB of Central Excise Act 1944. (ii) I order appropriation of the amount of Rs.3,05,25,795.00 (Rupees Three crore Five lakhs Twenty five thousand Seven hundred & Ninety five only) against short payment of duty and Rs.14,38,279.00 (Rupees Fourteen lakhs Thirty eight thousand Two hundred & Seventy nine only) against payable interest already deposited towards the amount as demanded vide para above. (iii) I Impose penalty of Rs. 3,05,25,795.00 (Rupees Three crore Five lakhs Twenty five thousand Seven hundred & Ninety five only) upon M/s Chaudhry Hammer Works Ltd. ( 100% EOU), Khasra No. 34,35,36,37 & 38, Village Acheja, Post Dujana, Gautam Budh Nagar under provisions of Section 11AC of Central Excise Act, 1944 read with Rule 25 of the Central Excise Rules, 2002, and FTP. (iv) I impose penalty amounting to Rs.50,00,000/-( Rupees Fifty lacs only) on Shri Mukul Chaudhry, M.D.of M/s Chaudhry Hammer Works Ltd., ( 100% EOU), Khasra No. 34,35,36,37 & 38, Village Acheja, Post Dujana, Gautam Budh Nagar under Rule 26 of Central Excise Rules, 2002 read with FTP, and Central Excise Act; 1944 (v) I impose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it of 50% of the FOR value of export which was not permissible at all. 2.3 Thus the appellant effected clearances of goods in DTA in contravention of the provisions of the Notification No. 23/2003-CE dated 31.3.2003 and of FTP and was not entitled for the benefit of Notification No. 23/2003-CE dated 31.3.2003 or they failed to fulfill the conditions of the Notification No. 23/2003-CE dated 31.3.2003 and thus they did not discharge duty against DTA clearances correctly. 2.4 Further investigations and enquiries were made in the matter. Statements of Appellant 2, 3 and 4 who were hold in senior management positions with the appellant were recorded. Thus it was observed that that appellant short paid the duty as detailed in table below: S No Description Amount in Rs 1 Period 2008-09 & 2009-10 2 Amount Due as per proviso to Section 3 (1) 47746677 3 Amount Paid -17220882 4 Short Paid 30525795 2.6 On being pointed out the above, the appellant deposited duty and interest as detailed below and informed the department and informed the jurisdictional authorities: Amounts in Rs S No Letter Dated Duties Interest Total 1 29.01.2010 86,09,335 118328 87,27,663 2 17/1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and marbles [2023 (2) TMI 652 -Madras High Court] Rasi Electrodes Ltd [2021 (5) TMI 671-Madras High Court] Finished goods cleared by the appellants in DTA are similar to the goods exported by them. The legislative intent behind the provision regarding DTA clearance by EOU vide Circular 85/95-Cus is to broadly maintain a 1:1 co-orelation between the export item and the DTA clearance item, without going into minute details. Reliance for interpreting the word "similar" is placed on the following decisions: Axiom Cordages Ltd. [2021 (%) TMI 665 Cestat Mumbai] DCM Hyundai Ltd. [2023 (4) TMI 211-CESTAT Chennai)] NFE at the time of clearance of finished goods was positive. Prior permission for DTA sale was not required by the Appellant. Exemption from BCD & SAD has been rightly availed by the Appellants on sale of scrap. Third time cess is not payable. Reliance is placed on the following decisions: Sarla Performance Fibers Ltd. [2010 (253) ELT 203 9T-Ahd)] Meghmani Dyes & intermediates [2014 (11) TMI 615 -SC Meneta Automotive Components Private Limited [2023 (8) TMI 789 Cestat Chandigarh] Extended period is not invokable, interst could not have been demanded an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... %E0U/4467 dated 11.06.10. They also enclosed certificate issued by the Chartered Accountant certificate towards quarter-wise achievement of positive NFE (Cumulatively). 6.9 They Further submitted that since. the issue was not referred to the Development Commissioner, Excise Department cannot take decision in the matter in view of the decision of case titled as "Apex Recycling Pvt.Ltd. Vs. Commissioner of Central Excise, Delhi-1" in which it was held "when LOP cancelled by Development Commissioner unit can be debonded. Cancellation of private bonded warehousing license wrong when LOP not expired. Adjudication order holding failure to achieve NFE not sustainable when issue not referred to Development Commissioner. 6.10 With regards to the allegation regarding Permission for DTA sale before sale: (para2 (iv) (c) of SCN), they submitted that their unit being a 'Status Holder' EOU does not require permission for DTA Sale as per Hand Book of Procedure Volume 1 and only prior intimation needed to be given which they had done. 6.11 They also added that no SAD was imposable as they under sub-section (5) of section 3 of The Customs Tariff Act, 1975 because they were availing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FE, before DTA clearances, the calculation of NFE as per above method was totally wrong since the unit had applied for debonding and have now. no more a status of 100% EOU unit on date. Therefore, the annual calculation of NFE based on amortization rates as per 6.9.4 would not be applicable, meaning thereby that the positive NFE assertion made by the party was faulty and incorrect and contains no validation from the Development Commissioner. Hence it was in violation of the provision of the FTP 6.14.1 I further find that there is an allegation against them that the goods cleared by them in DTA were not similar to the goods cleared for export. In this regard, with their written submissions dated 18.4.2011, they have enclosed a certificate from DEBA Engineers & Consultants a duly certified chartered engineers, who have justified the similarity of goods on the ground that both type of goods namely sold in DTA and exported were manufactured by same process i.e. forging and hence were similar and that variation in description, dimension, chemical composition, mechanical properties etc do not change the similarity aspect of the goods. Regarding similarity of the goods I find that CBEC, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that when there is export of flanges and rings of specific design and drawing, these goods and the flanges & rings of other specifications cannot be treated as similar goods .In.this regard, the certificate of Chartered Engineer, submitted by the party is too general and is not relevant to the provisions of notfn. No. 23/2003 dated 31.03.03 5.14.2 find that for availment of benefit of the said notification relating to DTA sales, there were basic 3 conditions- (a) The goods sold in DTA should be similar to the goods which are exported; (b) The unit should have achieved positive NFE; (c) DTA sale entitlement/ permission from Development Commissioner should be available to the unit beforehand for undertaking DTA clearances; 6.14.3 I further find that unless all these three conditions were satisfied, a 100% EOU unit was not entitled to sell their goods in DTA at concessional rate of duty in terms of Notfn. 23/2003 during the period under dispute. Hence when the first condition of similarity of goods was not satisfied, even if there could be positive NFE and even if the permission from the Development Commissioner might not be required for a status holder exporter, a 100% E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds in DTA over and above the eligible limit of 50% of FOB value under notfn. 23/2003 6.15.2 In this regard I find that though entire amount of duty involved in the case stands paid by the party, partly under protest and partly without protest. However, the said payment was made by the party only after the initiation of the enquiry by the Department in the matter and only when the wrong availment of the benefit of Notfn. 23/2003 was pointed out after the same came to the notice of the Department. Hence it cannot be said that the payment which has not been claimed under protest is voluntary. In fact, the stand of the party still remains that they were entitled for Notfn. 23/2003 and as the clearances in DTA exceeded over 50% of FOB value, the amount of duty attributable to said clearances was paid without protest. However, the fact cannot be negated by them that the clearances of goods , not being similar, were in contravention of the provisions of FTP as well as Notfn. 23/2003 and were made knowingly and willingly without keeping in mind the provisions of Foreign Trade Policy. Therefore, on this ground I find that they are not entitled for any relief against the charges made and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding entry in column (2) of the said Table, produced or manufactured in an Export oriented undertaking or an Electronic Hardware Technology Park (EHTP) Unit or a Software Technology Park (STP) Unit and brought to any other place in India in accordance with the provisions of Foreign Trade Policy and subject to the relevant conditions specified in the Annexure to this notification, and referred to in the corresponding entry in column (5) of the said Table, from so much of the duty of excise leviable thereon under section 3 of the Central Excise Act as specified in the corresponding entry in column (4) of the said Table. TABLE Sr. No Chapter or heading No. or sub-heading No. Description of Goods Amount of duty Conditions 1 2 3 4 5 3 Any Chapter All goods other than those referred to in 5, 5A, 6, 7 and 7A of this Table In excess of amount equal to aggregate of duties of excise leviable under Section 3 of the Central Excise Act or under any other law for the time being in force on like goods produced or manufactured in India other than in an export oriented undertaking, if sold in India. 3 Condition no. 3 of the Notification states that:- "If- (i) the goods are pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. (2) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the revenue. (3) The ratio in Sun Export case (supra) is not correct and all the decisions which took similar view as in Sun Export case (supra) stands overruled. 4.7 The basic of the EOU scheme is for promotion of the exports. From para 6.8 of the Foreign Trade Policy reproduced above it is quite evident that the entire production of the EOU is to be exported and the DTA sales are permitted in certain specific conditions subject to the restrictions and conditions imposed. The Exemption Notification 23/2003-CE which is in respect of the DTA sales made by an EOU needs to be considered in an strict manner in accordance with the scheme. The appellant soon after starting their EOU started clearance of the scrap/ goods in DTA. The intentions of the appellant by making such huge clearances of scrap and goods within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... how Cause notice the proceedings in respect of the amounts so deposited could not have been initiated against the appellant and the same should have been closed as per law. 4.10 Appellant has raised certain issues in respect of denial of natural justice by stating that the order is non speaking order. However we do not find any merits in the said submission as the impugned order records the reason for arriving at the findings. Hon'ble Supreme Court has in case of Saheli Leasing & Industries Ltd [2010 (253) E.L.T. 705 (S.C.)] observed as follows: "6. We, therefore, before proceeding to decide the matter on merits, once again would like to reiterate few guidelines for the Courts, while writing orders and judgments to follow the same. 7. These guidelines are only illustrative in nature, not exhaustive and can further be elaborated looking to the need and requirement of a given case :- (a) It should always be kept in mind that nothing should be written in the judgment/order, which may not be germane to the facts of the case; It should have a co-relation with the applicable law and facts. The ratio decidendi should be clearly spelt out from the judgment/order. (b) After prepar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned order. As the no separate demand has been made in respect of these demand we do not find any merits in the said submission. 4.12 Appellant would be correct in their submissions to the effect that these proceedings could have been adjudicated only after the concurrence from the Development Commissioner. However in the interest of justice and for the reason that the appellant would suffer unnecessary hardship if we remand the matter back to original authority after nearly 15 years for re-adjudication after obtaining necessary concurrence from the Development Commissioner we are not inclined to take that course of action. All litigations must end and not be kept alive for some procedural inadequacies. Even the Board Circular relied upon do not bar initiation of proceedings but only restricts the adjudication of the same without concurrence from the concerned Development Commissioner. While making this observation we also note that the appellant have themselves opted out of the EOU scheme within three years (instead of 10 years) from the date of commencement of their operations as EOU as per the permission granted by the Development Commissioner and have got their unit de-bon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ager. I find that they were summoned for tendering of their statements. From their statements I find that they were in complete knowledge of the clearances of goods in DTA which were not similar to the exported goods. Shri Mukul Chaudhry, Managing Director of M/s Chaudhry Hammer Works Ltd., stated that the goods manufactured by the EOU are tailor made to Customer's specific requirement conforming to the drawing and design having different mechanical properties and they are not similar. He admitted that he was responsible for the overall functioning of the unit and as an MD all the responsibilities and final decisions were taken by him. He also admitted that with respect to EOU clearances, Shri Manoj Singhal and Shri Gayatri Nath Srivastava, Vice President was responsible for duty payments and other procedures pertaining to EOU. I, therefore, find that Shri Mukul Chaudhry, Shri Gayatri Nath Srivastava and Shri Manoj Singhal were fully aware of the violations committed by the party & were actively involved in transporting, depositing, keeping, concealing, selling & purchase of excisable goods which they knew or had reason to believe were liable to confiscation under the Central E ..... X X X X Extracts X X X X X X X X Extracts X X X X
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