TMI Blog2005 (10) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... mination by the AC/DC Central Excise and not automatically from the fact of grant of approval by the Development Commissioner. In this connection in somewhat similar situation, the Honorable Supreme Court in the case of M/s. Sheshank Sea Foods v. U.O.I.[ 1996 (11) TMI 67 - SUPREME COURT] held that, notwithstanding the fact that the D.G.F.T. authorities have the jurisdiction to determine the aspect of fulfillment of export obligation [under the Foreign Trade (DQR) Act] the custom authorities are also empowered to ascertain the aspect of fulfillment of export obligations for the purpose of entitlement to customs duty exemption in terms of customs Notification No. 204/92-Cus. This view is also further supported in terms of Supreme Court judgment reported in the case of British Airways PLC v. UOI, [ 2001 (11) TMI 81 - SUPREME COURT] . Therefore, we hold that obtaining the permission from the Development Commissioner is only one of the steps and not the only step for seeking the benefit of exemption under notification No. 2/95-C.E. and the Central Excise authorities (including the Commissioner of Central Excise) are well within their legal right to determine the quantum of D.T.A. cleara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 5% of the value of production, as stipulated in the Policy. We also note that, the appellants had effected clearance to D.T.A., in violation of the provisions of Central Excise law and the imposition of penalty was justified. Since the quantum of duty is required to be recalculated the penalty also will require requantification. Accordingly we hold that the appellants are liable to the duty and penalty. However, since the amount of duty liability and consequential penalty is required to be requantified, we remand the matter to the adjudicating authority for the limited purpose of requantification of the duty and penalty in the light of our observations in the preceding para. Except for this modification, the rest of the order of the Commissioner is confirmed and the appeal of the appellants in respect of these points stands rejected. The adjudicating authority shall recalculate the duty liability and penalty after hearing the party. Difference Of Opinion - I find that this issue remains discussed in detail in our earlier judgment in the case of Ginni International Ltd v. CE, [ 2001 (9) TMI 165 - CEGAT, COURT NO. IV, NEW DELHI] , I am in respectful agreement with that decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts attack against the findings recorded by the adjudicating authority is on two main grounds : (i) The words 50% F.O.B. value of exports would also include deemed export under para 9.9 of the policy. (ii) In case of Rejects, Waste etc., no D.T.A. permission is required. 3. We have heard both sides. 4. On perusing the contents of the impugned order, we note that, the appellants have made a claim for duty concession in terms of Notification No. 20/98-C.E., dated 18-7-1998. We note that, the said claim was rejected on the ground that, the said exemption can be extended only in the event the finished goods were manufactured from indigenous raw materials. It was held that, since the raw materials were received from the other 100% EOU, these are deemed to be imported materials. As far as this objection is concerned, we note that, it is totally contrary to the law EOUs being domestic units the products made therein are obviously indigenous. Case laws in the case of (i) Vikram Ispat reported in 2000 (120) E.L.T. 800 (Tri.-LB) (ii) CCE, Jaipur v. Maiden Trading Co. Pvt. Ltd. reported in 2001 (132) E.L.T. 431 (Tri.-Del). Accordingly we hold that the appellants are entitled to the said exemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in terms of the said third proviso, the Assistant/Deputy Commissioner is empowered to determine the quantum of D.T.A. clearance for duty concession, countering this position, the appellants claim that such an exercise tantamount to sitting over the judgment of the Development Commissioner. The appellants have cited the judgments of CEGAT in the case of Ginni International Ltd. v. CCE reported in 2002 (139) E.L.T. 172 (Tri.-Del.) and subsequent judgments which relied on the case law of Ginni International Ltd. (supra) to claim that once the permission was obtained from the Development Commissioner the excise authorities have no jurisdiction to question the contents of such permission. 7. We have perused the CEGAT judgment in the case of Ginni International Ltd. (supra) which has been relied upon in the subsequent judgments of the CEGAT cited by the appellants. On carefully going through the text of the said judgment, we note that certain facts present in that case are of critical significance. The first and foremost, there is no discussion in the said judgment that, in terms of the third proviso to Notification 2/95-C.E., notwithstanding the permission granted by the Development C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proposition. 10.1 However, as we have noted, in the case before us, a note is required to be taken of the fact that the third proviso to the notification specifically requires that AC /DC Central Excise is also required to be satisfied with the quantum of permissible clearances to D.T.A. in terms of the Policy. The entitlement to exemption flows from the said determination by the AC/DC Central Excise and not automatically from the fact of grant of approval by the Development Commissioner. In this connection in somewhat similar situation, the Honorable Supreme Court in the case of M/s. Sheshank Sea Foods v. U.O.I., reported in 1996 (88) E.L.T. 626 (S.C.) held that, notwithstanding the fact that the D.G.F.T. authorities have the jurisdiction to determine the aspect of fulfillment of export obligation [under the Foreign Trade (DQR) Act] the custom authorities are also empowered to ascertain the aspect of fulfillment of export obligations for the purpose of entitlement to customs duty exemption in terms of customs Notification No. 204/92-Cus. This view is also further supported in terms of Supreme Court judgment reported in the case of British Airways PLC v. UOI, reported in 2002 (139) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uantum of D.T.A. clearances for exemption under Notification No. 2/95-C.E. was correct. On this point we note that though the notification speaks of entitlement in terms of 50% F.O.B. value of exports the Exim Policy provisions nowhere mentions about inclusion of deemed exports. The terms export is well defined under Section 2(18) of the Customs Act, 1962. Unless the policy itself in specific terms provides that the term export in the said paragraph shall also include deemed exports, the term export has to be accorded its natural meaning especially the meaning which is assigned to the term in Customs and Central Excise when the subject deals with excise exemptions. In this regard, the appellants themselves have relied upon the judgment of the Tribunal in the case of Vikram Ispat (supra) and other judgments to claim that the supplies from 100% EOUs to their, unit cannot be treated as import for the purpose of interpreting the scope of exemption Notification No. 20/98-C.E., dated 18-7-98, to which we have agreed as per our findings recorded in para 5. In the said judgments the Tribunal had relied upon the definition of the term import under Section 2(23) of the Customs Act to hold th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y up to the extent of 5% of the value of production, as stipulated in the Policy. 15. We also note that, the appellants had effected clearance to D.T.A., in violation of the provisions of Central Excise law and the imposition of penalty was justified. Since the quantum of duty is required to be recalculated the penalty also will require requantification. 16. Accordingly we hold that the appellants are liable to the duty and penalty. However, since the amount of duty liability and consequential penalty is required to be requantified, we remand the matter to the adjudicating authority for the limited purpose of requantification of the duty and penalty in the light of our observations in the preceding para. Except for this modification, the rest of the order of the Commissioner is confirmed and the appeal of the appellants in respect of these points stands rejected. The adjudicating authority shall recalculate the duty liability and penalty after hearing the party. 17. The appeal stands disposed of in the above terms. (Pronounced on ..) Sd/- (K.D. Mankar) Member (T) 18. [Contra per : S.S. Kang, Member (J)]. - I have gone through the order written by Hon ble Technical Member. Hon ble T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sition of penalty is also set aside. The appeals are allowed to this extent only. Sd/- (S.S. Kang) Member (J) DIFFERENCE OF OPINION 19. Whether taking into facts and circumstances of the case, the value of deemed export was required to be excluded and the Central Excise Authority were not required to be bound by the quantification of D.T.A. clearance fixed by the Development Commissioner as held by the Hon ble Member (Technical) or in view of the decision of the Tribunal in the case of Ginni International, reported in 2000 (139) E.L.T. 172, the Revenue Authority cannot go beyond the permission and dispute the value of clearance allowed by the Development Commissioner as held by Member (Judicial). Sd/- (K.D. Mankar) Member (T) Sd/- (S.S. Kang) Member (J) 20. [Order per : C.N.B. Nair, Member (T)]. - Heard both sides and perused records in relation to the difference of opinion referred to me. 21. The appellant is an E.O.U. and is entitled to sell in the Domestic Tariff Area (DTA), up to 50% of the F.O.B. value of its exports. The issue raised is whether F.O.B. value of exports takes in the value of all exports or only the value of physical exports. In other words, whether 50% is to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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