2010 (1) TMI 1158 - AT - Central Excise

Summary

Issues involved: Interpretation of Foreign Trade Policy and Exemption Notification for 100% EOU, calculation of clearances to domestic tariff area, invocation of extended period for duty demand, penalty imposition, similarity of goods exported and cleared domestically, categorization of dyes, proper annexure to show cause notice, remand for fresh decision.

Interpretation of Foreign Trade Policy and Exemption Notification: The Appellant, a 100% EOU, was permitted to clear 50% of dye quoted quantity into the domestic tariff area u/s para 6.8 of Foreign Trade Policy and Exemption Notification No.23/2003-CE dated 31.3.2003. The department invoked the extended period for duty demand and penalty imposition based on the view that clearances should be calculated for each dye separately, relying on customs valuation rules for defining similar goods exported and cleared domestically.

Invocation of Extended Period: The Commissioner took the view that the extended period should be calculated from the end of the financial year. However, the Tribunal, based on a previous case, held that the extended period is not invokable in this scenario due to similarities in facts such as filing of returns, submission of documents, and permissions from the Development Commissioner.

Categorization of Dyes and Similarity of Goods: Unlike the previous case involving Agro Chemicals, in this case, there was no categorization of dyes for eligibility determination, and details were not available. The Tribunal emphasized the need for a discussion on each item to determine why the benefit of the notification cannot be extended, requiring a remand for a fresh decision by the Commissioner.

Proper Annexure to Show Cause Notice: The Appellant argued that there was no proper annexure to the show cause notice, making it difficult to identify whether the demand by the department was in respect of the same goods. The Tribunal, considering the lack of clarity, waived the pre-deposit requirement, allowed the stay petition, and remanded the matter to the Commissioner for a fresh decision after considering submissions from the Appellants.