2005 (12) TMI 316 - AT - Central Excise

Summary

Issues:
1. Whether deemed export can be considered for the DTA quota for a 100% EOU.

Analysis:
The core issue in this appeal is whether deemed exports can be reckoned for considering the DTA quota for a 100% EOU. The Commissioner, in the impugned order, relied on the decision in the case of Sanju Silk Mills Pvt. Ltd. v. CCE, Surat - 2004 (163) E.L.T. 217 (Tri-Mum.), which concluded that only physical exports outside India should be considered for DTA sales. However, the Tribunal considered the distinction made in previous cases like Ginni International Ltd. v. Commissioner - 2002 (139) E.L.T. 172 (Tri.-Del.) and Shabnam Synthetics Ltd. v. Commissioner - 2003 (152) E.L.T. 123 (Tri.-Mum.) and found that there is no reason not to consider deemed exports for reckoning the DTA quota under the current notification (Notification No. 23/2003). The Tribunal ordered a full waiver of pre-deposit amounts required under Section 35F of the Central Excise Act, 1944, to hear the appeal, and also ordered a stay of recovery of this amount.

The Tribunal analyzed the previous decisions and the specific language of the notification in question to determine whether deemed exports should be included in calculating the DTA quota for a 100% EOU. While the Commissioner relied on the requirement of physical exports outside India, the Tribunal found that the notification did not explicitly exclude deemed exports. The Tribunal emphasized that the terms of the exemption notification issued by the Finance Ministry should be strictly followed in determining entitlement to duty exemption. The Tribunal also considered the absence of clauses similar to "taking out of India to a place outside India" and "the free on board value of export" in the current notification, which supported the inclusion of deemed exports in the DTA quota calculation.

The Tribunal further deliberated on specific issues raised by the Commissioner, such as the lack of permission from the Development Commissioner and the non-achievement of positive NFE. The appellant argued that an application for approval of DTA removal had been submitted to the Development Commissioner and that the NFE achievement was not a relevant issue raised in the Show Cause Notice or the impugned order. The Tribunal acknowledged that these issues would need to be examined in detail during the regular hearing but, at the prima facie stage, considered the appellant to have made out a case for the removals to be considered at the prescribed duty rates under Notification No. 23/2003-C.E. The Tribunal, therefore, granted a full waiver of pre-deposit amounts and ordered a stay of recovery pending the appeal hearing.

In conclusion, the Tribunal's decision revolved around the interpretation of the notification language, the adherence to exemption notification terms, and the consideration of deemed exports in calculating the DTA quota for a 100% EOU. The Tribunal granted the appellant a waiver of pre-deposit amounts and stayed the recovery pending the appeal hearing, based on the prima facie case made by the appellant.