2009 (11) TMI 715 - AT - Central Excise

Summary

Issues: Eligibility of appellants to clear by-product to DTA under Notification No. 2/95-C.E. availing concessional rate of duty.

Analysis:
1. Facts: The appellants are engaged in manufacturing goods falling under Chapter 28, 32 & 39 of CETA, 1985. They produce Copper Phthalocynine Blue Crude (CPC Blue), which results in a by-product called Ammonium Carbonated Solution (APS). The appellants claimed exemption under Notification No. 2/95-C.E. for APS cleared in DTA, despite not exporting the main product.

2. Legal Provisions: The Board's instructions under Notification No. 31/2001-Cus, dated 24-5-01, allow by-products to be cleared for sale in DTA on payment of concessional duty subject to fulfilling NFE requirement. Notification No. 2/95-C.E. was amended to implement this provision.

3. Department's Stand: The department contended that the appellants were not eligible for the concessional duty rate under Notification No. 2/95. Duty amounting to Rs. 18,57,805/- with interest and a penalty of Rs. 5,76,120/- were imposed.

4. Judgment: The Tribunal found that the appellants had not exceeded the limit of 50% of total export value for clearances to DTA, as per the foreign trade policy. It was established that the NFE requirement had been fulfilled. The appellants provided proof from the Development Commissioner confirming NFE achievement. Consequently, the appeal was allowed, and relief granted to the appellants.

5. Conclusion: The Tribunal ruled in favor of the appellants, emphasizing compliance with foreign trade policy requirements and the eligibility to clear the by-product to DTA under Notification No. 2/95-C.E. with the concessional duty rate. The judgment highlighted the importance of fulfilling NFE conditions and providing necessary documentation to support the claim.