2006 (7) TMI 365 - AT - Central Excise

Summary

Issues Involved:
1. Eligibility for concessional rate of duty under Central Excise Notification No. 8/97.
2. Interpretation of EXIM Policy 2002-07, specifically paras 6.8(b) and 6.9(b).
3. Authority of the Development Commissioner in granting permissions.
4. Classification of DTA sales as deemed exports.
5. Applicability of CBEC Circulars and previous Tribunal decisions.

Detailed Analysis:

1. Eligibility for Concessional Rate of Duty under Notification No. 8/97:
The respondents, a 100% EOU, claimed the benefit of a concessional rate of duty under Central Excise Notification No. 8/97 for their DTA sales of wooden boxes. The department contested this, arguing that the benefit was only available for sales made under specific sub-paragraphs of para 6.8 of the EXIM Policy, not under para 6.9(b). The Tribunal upheld that the benefit was indeed available as the sales were permitted under para 6.8(b) and the Development Commissioner's approval included these goods.

2. Interpretation of EXIM Policy 2002-07 (Paras 6.8(b) and 6.9(b)):
The department argued that para 6.8 and para 6.9 were independent and that sales under para 6.9(b) could not benefit from the concessions of para 6.8. The Tribunal disagreed, stating that para 6.9(b) operated within the scope of fulfilling conditions under para 6.8(b), thus not independent. The Tribunal emphasized that the Development Commissioner's permission for DTA sales under para 6.8(b) included wooden boxes, making them eligible for the concessional duty.

3. Authority of the Development Commissioner:
The Tribunal reinforced the authority of the Development Commissioner in granting permissions for DTA sales. It cited previous decisions, emphasizing that once the Development Commissioner permits sales up to a fixed value, the Revenue cannot restrict this based on their interpretation of the EXIM Policy. The Tribunal referenced the Development Commissioner's letter dated 22-5-2002, which explicitly allowed DTA sales of wooden boxes under para 6.8(b).

4. Classification of DTA Sales as Deemed Exports:
The Tribunal addressed the argument that sales under para 6.9(b) were deemed exports and thus not eligible for the same benefits as physical exports. It clarified that supplies made against foreign exchange could be counted towards NFEP/EP fulfillment and treated on par with physical exports. This interpretation aligned with previous Tribunal decisions, which treated such sales as eligible for concessional rates.

5. Applicability of CBEC Circulars and Previous Tribunal Decisions:
The Tribunal considered CBEC Circular No. 29/2003-Cus and previous Tribunal decisions, notably Kurt-O-John Shoe Components and Ginni International Ltd., which supported the respondents' position. It concluded that the circulars and case law consistently upheld the Development Commissioner's permissions and the eligibility of DTA sales for concessional duty under the relevant notifications.

Conclusion:
The Tribunal upheld the lower appellate authority's decision, confirming that the respondents were eligible for the concessional duty rate under Notification No. 8/97 for their DTA sales of wooden boxes. It dismissed the Revenue's appeal, emphasizing the Development Commissioner's authority and the interconnectedness of paras 6.8 and 6.9 of the EXIM Policy.