TMI Blog2001 (10) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... t the duty that should be paid on such clearances would, in accordance with the proviso under sub-section (1) of Section 3 of the Central Excise Act, 1944, be equal to the customs duty which will be leviable under Section 12 of the Customs Act, 1962 on like goods produced by a manufacturer outside India. He has held that the duty that should be paid was to be calculated, and also imposed a penalty on the appellant under Rule 173Q for various contravention. The Commissioner had rejected the contention taken before him that the benefit of Notification 53/97 would be available to these goods. 3.In our opinion he is right. The notification exempts from customs duty goods specified in the table to it imported into India or procured from a bond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time being in force issued under Section 25(1) of the Act. We have noted that Section 12 of the Customs Act, 1962 applies to goods sold to domestic tariff in India, the rage or duty leviable on like goods when imported into India. In terms of this notification, therefore, the rate of duty that applicable would be 50% of that duty. The reason that the Commissioner has advanced for denying the benefit of this notification is that the goods have not been sold in terms of sub-paragraphs of Para 9 that is specified in the notification. 5.Paragraph 9.9 of the Policy, which refers to sales to the domestic tariff area provides in sub-para (b) as follows : 6.Domestic tariff area sale up to 50% of the FOB value of the exports may be made sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aragraph 9.9 but in terms of 9.10 which is not specified in the notification. As we have seen Paragraph 9.9 and 9.10 deals with two different issues altogether. Para 9.9 prescribed the mode of disposal of the goods manufactured by a 100% EOU. It lays down that the entire production of such EOU shall be exported and thereafter proceeds to specify exceptions. Among these are, goods sold in the domestic tariff area or up to 50% of the FOB value of the exports. Paragraph 9.10 consists series of deeming provisions holding that the supplies to domestic tariff area of various kinds among which those made against payment in foreign exchange shall be counted towards fulfilment of export performance. Therefore the supplies made by the appellant to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally exporting the goods. We are unable to see anything in the Policy that supplies to domestic tariff area against foreign exchange on a higher level than exports. Therefore supplies to domestic tariff area against foreign exchange would be treated on the same footing as physical exports. 8.We are, however, unable to agree that the entire supplies to the domestic tariff area made by the appellant (we repeat made against foreign exchange) be entitled to the benefit of exemption. Counsel for the appellant was at considerable pain to point out that the object of the notification must be kept in mind while considering its provisions. The object of the notification as of these provisions in the policy is clear, is to promote exports and for e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner shall calculate the duty payable by applying the provisions of Paragraph 9.9(b) and communicate to the appellant. 11.The Commissioner accepts that there has been no wilful defiance of law by the appellant and that interpretation of the notification is involved, but says that to any prudent person including a layman, it is clear that the exemption is not available to the clearances made by the appellant. We have not found it possible to agree with him fully. That alone should indicate that the issue of interpretation of the provisions of notification were debatable. In the absence of any admitted concealment of facts or wilful defiance of law we do not find that penalty was justified and set it aside. 12.The appeal is accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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