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TMI Blog2025 (3) TMI 777X X X X Extracts X X X X X X X X Extracts X X X X ..... stries, for the manufacture of the same they procured duty-free materials under Notification No.52/2003-Cus dated 31.03.2003 and also procured indigenous components under CT-3 in terms of Notification No.22/2003-CE dated 31.03.2003. On verification of records, it was found that the appellant had cleared finished goods in DTA without payment of duty by availing the benefit of the exemption Notification No. 39/96 and 51/96-Cus dated 23.07.96. The Commissioner in the impugned orders relying upon the proviso to Para 3 of the Notification No.52/2003 read with Board Circular No.54/2004-Cus dated 13.10.2004 held that duty foregone on the inputs used in the manufacture of the finished goods cleared into DTA without payment of duty needs to be discharged. Accordingly, upheld the demands confirmed by the original authority under the provisions of Notification No. 52/2003 dated 31.03.2003, along with interest under Section 28AB of the Customs Act, 1962. Aggrieved by the above orders, the appellant is in appeal before us. 3. The Learned Counsel submits that the Appellant a 100% EOU under EOU-EHTP Scheme formulated by the Government in terms of Chapter 6 of the Foreign Trade Policy/ Exim Polic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 of Notification No.22/2003-CE and there is no requirement of payment of "duty-foregone" on raw materials used in such goods in terms of proviso thereto. The revenue has confirmed demand of duty-foregone by invoking proviso to paragraph-3 of Notification No.52/03-Cus or paragraph-6 of Notification No.22/03-CE which is inapplicable to the facts of the present case. It is stated that they are governed and covered by the main paragraph-3 of Notification No.52/03-Cus or paragraph-6 of Not.No.22/03-CE itself. As per paragraph-3 of Not.No.52/03-Cus or paragraph-6 of Not.No.22/03-CE, it is submitted that, - (a) It is a non-obstante clause viz., "Notwithstanding anything contained in this notification". Hence, it overrides the entire notification(s) in question. (b) As per paragraph-3 of Not.No.52/03-Cus or paragraph-6 of Not.No.22/03-CE, the exemption shall also apply to goods which, on importation into India or procurement are used for manufacture of finished goods or services and such finished goods or services (including by-products, rejects, waste and scrap arising in the course of manufacture, etc) even if not exported are allowed to be - (i) Sold in DTA as per FTP "on payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A of the CEA, 1944, hence, the impugned order(s) are without any jurisdiction to demand. Further, it is not the case of the revenue that Condition-(3)(d) of Notification No.52/03-Cus or Notification No.22/03-CE are applicable viz., "execution of bond to pay on demand". On the contrary, Condition-(3)(d)(ii) of the Notification(s) is not applicable at all to the Appellant, hence, the demands confirmed in the impugned order(s) are without jurisdiction. 3.5. With regard to invocation of extended period of limitation it is submitted that the revenue has confirmed demand in respect of finished goods cleared in DTA for the period from February 2008 to March 2011 and the first set of SCNs were dated 11.05.2011, none of the SCNs or the impugned order had invoked Section 28 of the Customs Act or Section 11A of the CEA, 1944. Further, there is no allegation of presence of any of the omissions or commissions envisaged in proviso to Section 11A of the Central Excise Act, 1944 or Section 28 of the Customs Act, 1962. It is further stated that the law is well settled that even in the case of EOU the demand of duty has to be made necessarily by invoking Section 28 or Section 11A and not merely bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacture of the final products which are cleared under DTA without payment of duty availing the benefit of various exemption notifications. For ease of reference the relevant provisions of the Notification No. 52/2003-Cus dated 31.03.2003 are reproduced below: "Notwithstanding anything contained in this notification, the exemption herewith shall also apply to goods which on importation into India or procurement, are used for the purpose of manufacture of finished goods or services and such finished goods and services, (including by-products, rejects, waste and scrap arising in the course of production, manufacture, processing or packaging of such goods) even if not exported, are allowed to be sold in Domestic Tariff Area in accordance with the Export and Import Policy and subject to such other limitations and conditions as may be specified in this behalf by Development Commissioner, or the Board of Approval or the Inter Ministerial Standing Committee, as the case may be, on payment of appropriate duty of excise leviable thereon under Section 3 of the Central Excise Act. 1944 (1 of 1944) or where such finished goods (including by-products, rejects, waste and scrap) or services ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alized and that for the purpose of determining whether refund should be provided, a restriction of the kind which has been imposed in clause (ii) of the proviso should be enacted, it lies within the realm of policy. Construing the proviso 63. Provisos in a statute have multi-faceted personalities. As interpretational principles governing statutes have evolved, certain basic ideas have been recognized, while heeding to the text and context. Justice G.P. Singh, in his seminal text, Principles of Statutory Interpretation formulates the governing principles of interpretation which have been adopted by courts while construing a statutory proviso. The first rule of interpretation is that : "The normal function of a proviso is to except something out of the enactment or to qualify something enacted therein which but for the proviso would be within the purview of the enactment. As stated by LUSH, J. : "When one finds a proviso to a section the natural presumption is that, but for the proviso, the enacting part of the section would have included the subject-matter of the proviso. In the words of LORD MACMILLAN : "The proper function of a proviso is to except and to deal with a case wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... election of one or other of two possible constructions of the words to be found in the enactment, and show when there is doubt about its scope, when it may reasonably admit of doubt as to having this scope or that, which is the proper view to take of it [Id at p. 223]." (iv) An effort should be made while construing a statute to give meaning both to the main enactment and its proviso bearing in mind that sometimes a proviso is inserted as a matter of abundant caution: "The general rule in construing an enactment containing a proviso is to construe them together without making either of them redundant or otiose. Even if the enacting part is clear effort is to be made to give some meaning to the proviso and to justify its necessity. But a clause or a section worded as a proviso, may not be a true proviso and may have been placed by way of abundant caution [Id at p. 226]." (v) While ordinarily, it would be unusual to interpret the proviso as an independent enacting clause, as distinct from its main enactment, this is true only of a real proviso and the draftsperson of the statute may have intended for the proviso to be, in substance, a fresh enactment: "To read a proviso as pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R 1961 SC 1040 : (1961) 2 SCR 493 : (1961) 41 ITR 290] this Court held that by the fiction in Section 10(2)(vii) second proviso read with Section 2(6C) of the Indian Income Tax Act, 1922 what is really not income is, for the purpose of computation of assessable income, made taxable income." Besides the decision in CIT v. Bipinchandra Maganlal [AIR 1961 SC 1040], the Court in Hiralal Rattanlal (supra) adverted to the earlier decisions in State of Rajasthan v. Leela Jain [AIR 1965 SC 1296] and Bihar Cooperative Development Cane Marketing Union Ltd. v. Bank of Bihar [AIR 1967 SC 389]". 5.2. In view of the above interpretation, we do not find any reason to accept the contention of the learned counsel that the proviso is independent of the main clause para 3 of the Notification 52/2003. 6. The second issue is whether the provisions of conditions of notification 52/2003 can be invoked to demand the duty when these conditions are violated without invoking Section 28 of the Customs Act, 1962 or Section 11A of Central Excise Act, 1944. The Supreme Court of India in the case of Moser Baer India Ltd. vs. Commissioner of Customs, Noida dated 7-10-2015 while dealing with invocation of exten ..... X X X X Extracts X X X X X X X X Extracts X X X X
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