2006 (6) TMI 290 - AT - Central Excise

Summary

Issues involved:
Liability of 100% E.O.U. to levy additional excise duty under the Additional Duties of Excise (Goods of Special Importance) Act, 1957 when goods are cleared into the domestic tariff area.

Comprehensive Analysis:

1. Nature vs. Measure of Impost:
The main issue in dispute was the differentiation between the nature and measure of the impost regarding the liability of 100% E.O.U. to pay additional excise duty under the relevant Acts. The Tribunal analyzed the provisions of the Customs Tariff Act, 1975, and the Additional Duties of Excise (Goods of Special Importance) Act, 1957 to determine the nature and measure of the duty. It was clarified that the nature of the impost on goods manufactured in a 100% E.O.U. is the duty of excise, while the measure of the impost includes the aggregate duties of Customs, which consists of Basic Customs Duty and Additional Duty of Customs. The Tribunal emphasized that the measure of the additional duty of Customs is to be computed in accordance with the relevant notifications and Acts.

2. Notification Interpretation:
The Tribunal also delved into the interpretation of Notification No. 127/84 and Notification No. 2/95 to ascertain their applicability to goods cleared from E.O.U. to the Domestic Tariff Area. It was observed that while Notification No. 127/84 pertains to goods manufactured in E.O.U., it is silent about goods cleared to the Domestic Tariff Area. On the other hand, Notification No. 2/95 specifically addresses goods cleared in the Domestic Tariff Area and outlines the leviable duties under the Customs Act. The Tribunal concluded that Notification No. 127/84 is not attracted to the clearance of goods for DTA, emphasizing the importance of the specific language used in the notifications.

3. Precedent and Apex Court Judgment:
The Tribunal referred to the judgment of the Apex Court in Nahar Industrial Enterprises Ltd. v. Union of India to resolve the issue at hand. The Court's decision clarified the liability of 100% E.O.U.s to pay additional excise duty and the impact of relevant notifications. The Tribunal highlighted the Apex Court's ruling that the amendments to Notification No. 8/97-CE do not create a liability on 100% E.O.U.s to pay additional excise duty. The Tribunal applied the principles established in the Apex Court's judgment to the present case, where Notification No. 127/84 was deemed identical to Notification No. 55/91, leading to the rejection of the Revenue's appeals and upholding the order of the Commissioner (Appeals).

In conclusion, the Tribunal's detailed analysis of the nature, measure of the impost, interpretation of notifications, and application of the Apex Court's judgment resulted in the dismissal of the Revenue's appeals, affirming the exemption from payment of additional excise duty for 100% E.O.U.s under the relevant notifications and Acts.