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2011 (4) TMI 1181 - AT - Central ExciseExemption under Notification No. 13/86 dt. 9.2.86 read with Notification No.83/90 dated 20.3.90 denied - 100% EOU - The waste and scrap generated during the manufacture of hand tools are sold in the Domestic Tariff Area - Commissioner (Appeals), allowed the appeal filed by the Department who held that if two different rates of duties are prescribed, the higher of the rates should be taken for the purpose of assessing the goods manufactured and cleared from a 100% EOU - Held that - As the appeal filed by them against OIA dated 17.01.1997 was allowed by the Tribunal 2004 (3) TMI 120 - CESTAT, MUMBAI but Commissioner (Appeals) while passing the impugned order had relied upon the order dated 17.1.1997 passed by the Commissioner (Appeals) wherein he had decided the rate of duty applicable - Since the appeal filed by them against this order has been allowed, the appellants became eligible for the benefit of Notification No. 83/90 dated 20.3.1990 - Decided in favour of assessee.
Issues:
Central Excise duty on clearance of waste and scrap generated in the EOU but sold in the Domestic Tariff Area; Discrepancy in the rates of duties prescribed for goods manufactured and cleared from a 100% EOU; Demand of Central Excise duty and penalty imposed by the Asst. Commissioner; Appeal against the Order-In-Original and Order-In-Appeal; Benefit of Notification No. 83/90 dated 20.3.1990. Analysis: 1. Central Excise Duty on Waste and Scrap Clearance: The case involved the Central Excise duty demanded on the clearance of waste and scrap generated in the appellant's 100% EOU but sold in the Domestic Tariff Area. The appellants had filed classification lists claiming Central Excise duty @ 15% for this waste and scrap, which were approved by the Asst. Commissioner. However, the Commissioner of Central Excise reviewed the approval and directed an appeal, leading to a dispute over the applicable duty rates. 2. Discrepancy in Duty Rates for EOUs: The Commissioner (Appeals) held that if two different rates of duties are prescribed, the higher rate should be applied for goods manufactured and cleared from a 100% EOU. The appellants challenged this decision through an appeal before the CEGAT, Mumbai. Meanwhile, they were served with Show Cause Notices demanding differential Central Excise duty calculated at higher rates for a specific period, leading to further legal proceedings. 3. Demand of Central Excise Duty and Penalty: The Jurisdictional Asst. Commissioner passed an Order demanding Central Excise duty amounting to Rs. 23,33,816/- along with a penalty of Rs. 5.00 lakhs. The appellants contested this Order through an appeal before the Commissioner (Appeals), which was rejected based on the earlier decision regarding the rate of duty application. 4. Benefit of Notification No. 83/90: The appellants argued that their appeal against the earlier decision had been allowed by the Tribunal, making them eligible for the benefit of Notification No. 83/90 dated 20.3.1990. The Tribunal acknowledged this argument, holding that the benefit of the Notification was indeed available to the appellant, leading to the setting aside of the impugned order and allowing the appeal. In conclusion, the judgment addressed various issues related to Central Excise duty, duty rates for EOUs, demand of duty and penalty, and the application of beneficial notifications. The Tribunal's decision favored the appellants, recognizing their eligibility for the benefit of a specific notification and setting aside the impugned order based on previous legal proceedings and decisions.
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