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2011 (7) TMI 287 - AT - Central Excise100% EOU - whether the goods manufactured by the EOU were manufactured before they attained the status of EOU and out of duty paid goods or not - The respondent became a 100% EOU in September 2006. Prior to that it was a DTA unit - Department is not contesting the fact that respondent could have cleared the goods to DTA if they were manufactured out of duty paid inputs before they attained the 100% EOU status - In fact the authorized representative submitted that these goods were manufactured out of duty paid inputs before the unit attained 100% EOU status - Since the Range Officer s report was also not made available to the respondent and they did not get an opportunity to produce supporting evidence and also contest the Range Officer s report, even though appeal is required to be allowed in view of the error in fact finding by the learned Commissioner (Appeals), the same has to be remanded to the original adjudicating authority so that the respondents get an opportunity to present their case and also contest the Range Officer s report by producing evidences.
Issues:
1. Differential duty demand on goods cleared by a unit converting from DTA to 100% EOU. 2. Dispute regarding correlation between duty paid inputs and finished goods. 3. Error in fact finding by the Commissioner (Appeals) leading to the need for remand. Analysis: Issue 1: Differential Duty Demand The case involved a unit that converted from a DTA unit to a 100% EOU in September 2006. The dispute arose from the central excise duty paid by the unit on clearances in DTA status, which was deemed incorrect post-conversion. The duty demand of Rs.55,176/- was confirmed, along with penalties and a redemption fine. The appeal by the respondents was initially allowed by the Commissioner (Appeals), leading to the Revenue's appeal. Issue 2: Correlation of Duty Paid Inputs The crux of the matter revolved around the correlation between duty paid inputs during the DTA phase and the finished goods cleared post-conversion to EOU status. The original adjudicating authority had relied on a report from the Jurisdictional Range Officer, stating a lack of correlation between duty paid inputs and finished goods. However, the Commissioner (Appeals) seemingly overlooked this crucial point, leading to a factual error in the findings. Issue 3: Error in Fact Finding The Tribunal noted that the Commissioner (Appeals) had erred in presuming no dispute about the manufacturing of goods by the 100% EOU. The respondents were not given an opportunity to present evidence or contest the Range Officer's report. Therefore, despite the need for remand due to the error in fact-finding, the case was to be sent back to the original adjudicating authority. This remand would allow the respondents to present their case, contest the report, and ensure a fair decision based on all available evidence. In conclusion, the Tribunal set aside the impugned order and remanded the matter to the original adjudicating authority for a reevaluation, providing the respondents with a fair opportunity to present evidence and contest the Range Officer's report before a final decision is reached.
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