TMI Blog2003 (5) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... taken the view that in cases where goods are cleared to DTA by an EOU without the same being allowed by Development Commissioner the duty applicable would be in terms of Section 3(1) of the Central Excise Act, 1944, that is to say, the rate of duty payable by a non-EOU manufacturer in respect of sales for domestic consumption. The correctness of the above view is doubted by the referring Bench. The Bench felt that such an interpretation would create an anomalous situation where an EOU would pay a higher rate of duty in respect of supplies made to DTA with the permission of Development Commissioner and a lesser rate of duty in respect of goods sold in excess of the permission for clearance to DTA. It was under these circumstances the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in any other provision of this Act, be determined in accordance with the provisions of the Customs Act, 1962 (52 of 1962) and the Customs Tariff Act, 1975 (51 of 1975)." It is the case of the assessee which is an hundred percent EOU that for assessing the goods to duty under proviso to Section 3(1) two conditions have to be satisfied, namely, (a) that the goods should have been produced or manufactured by a 100% EOU and (b) that the goods should have been allowed to be sold in India. If the goods are sold by an hundred percent EOU in DTA in excess of permission of the Development Commissioner as is the allegation in the present case, the assessment has to be under the main provision of Section 3(1). In support of the above contention, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustoms duty leviable on like goods imported into India under the proviso to Section 3(1). Permission to withdraw from 100% Export Oriented Units Scheme granted to the assessee is equivalent to permission to sell the goods produced in India. On the other hand, the assessee contended that no permission is required to sell the goods manufactured by 100% EOU lying at the time approval for debonding was granted. It was further contended that it is immaterial as to when the goods were manufactured, the date of removal for sale in India is the relevant date. Central Excise duty could be charged at the rate prevalent at the time when the goods were sold by the assessee in India. On such date of sale, the 100% EOU was debonded and therefore, the rat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anomalous situation wherein an EOU would pay higher rate of duty in respect of supplies made to DTA with the permission of Development Commissioner and a lesser rate of duty in respect of goods sold in excess of the permission for clearance to DTA. In British Airways PLC Supreme Court has observed that while interpreting the statute the courts are required to keep in mind the consequences which are likely to flow upon the intended interpretation. It has been also observed therein that it is the duty of the court to give a harmonious construction of a statute and that such construction shall suppress the mischief and advance the remedy. Therefore, we hold that so long as an hundred percent EOU continues as an EOU it will be within the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tured or produced in India for which Section 3 is the charging section. EOUs are also situated in India and the chargeability under Central Excise Act is never in doubt. Therefore, it is clarified that prior to 11-5-2001, the clearances from EOUs if not allowed to be sold in India, shall continue to be chargeable to duty under main Section 3(1) of Central Excise Act, 1944. Appropriate action may be taken immediately to safeguard revenue and all pending decisions may be settled accordingly. [Circular No. 618/9/2002-CX., dt. 13-2-2002 vide F.No. 268/69/2001-CX.8 issued by Ministry of Finance] A reading of the above circular would show that it was issued pursuant to the decision of the Supreme Court in SIV Industries Ltd., but without un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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