2005 (1) TMI 481 - AT - Central Excise

Summary

Issues:
1. Interpretation of Notification 53/97-Cus regarding payment of Customs duty.
2. Applicability of Central Excise duty under proviso to Section 3(1) of the Central Excise Act.
3. Calculation of differential duty on excisable goods removed by 100% EOU.
4. Consideration of Notification 2/95 while calculating the differential duty.
5. Clarity on cum-duty price for goods sold in India.

Analysis:

1. The main issue in this case revolves around the interpretation of Notification 53/97-Cus concerning the payment of Customs duty. The contention was whether the aggregate of Customs duty is payable only when the goods removed into DTA are not excisable. The Tribunal clarified that the requirement for paying customs duty equal to the duty leviable on imported articles applies when goods allowed to be sold in India are not excisable, as exemplified by the processing of certain products by a 100% EOU.

2. The Tribunal analyzed the applicability of Central Excise duty under the proviso to Section 3(1) of the Central Excise Act. It was established that in cases where excisable goods are allowed to be sold, the central excise equivalent to the aggregate of customs duty payable on such articles is required to be paid. The appellant had removed excisable goods on payment of central excise duty as if they were from a domestic unit, leading to the determination of a differential duty payable under the proviso.

3. A crucial aspect of the judgment involved the calculation of the differential duty on the excisable goods removed by the 100% EOU. The Tribunal held that the differential duty should be calculated based on the duty already paid versus the duty leviable under the proviso to Section 3(1) of the Central Excise Act. Additionally, the benefit of Notification 2/95 needed to be considered while determining the differential duty.

4. The Tribunal highlighted the importance of according the benefit of Notification 2/95 while calculating the differential duty in this case. This notification likely played a role in determining the correct rate of duty payable, especially when dealing with excisable goods allowed to be sold in India.

5. Lastly, the Tribunal raised a concern regarding the clarity on whether the Revenue had considered the cum-duty price for goods sold in India while calculating the differential duty. This aspect needed further examination to ensure the accurate calculation of the duty payable. The appeal was partly allowed based on the Tribunal's findings and directions for the calculation of the correct rate of duty and the differential duty.