2012 (12) TMI 584 - AT - Central Excise

DTA clearance by 100% EOU - Whether assessee would be eligible for concessional rate of duty under notification no.23/03-CE in respect of the DTA sales for which there was no permission from the Development Commissioner - DTA sales made by assessee were in excess of the permitted DTA sales upto 31.3.2008 - On the payment of duty at the concessional rate under Notification No.23/03-CE Further, the assessee made DTA clearances from 1.4.08 to 31.09.2008, without the permission from the Development Commissioner at concessional rate of duty - Revenue contended that, DTA sales made in excess of the permitted value and without approval were not eligible for concessional rate Held that - For the period 2007 -2008, the DTA clearances made by the appellant were in excess of the permitted clearances by an amount and the same cannot be said to be in accordance with the provisions of para 6.8 of the Foreign Trade Policy and hence, would not be eligible for concessional rate of duty The period 1.4.2008 to 30.09.2008, the assessee not produced any letter from the Development Commissioner permitting the DTA clearances for this period. In absence of the Development s letter, it cannot be said that during this period the appellant had achieved positive NFE or that DTA clearances were within 50% of the FOB value of the exports. In view of this, we are of the prima facie view that for this period also, the appellant would not be eligible for concessional rate of duty under Notification No.23/03-CE. In favour of revenue

Summary

Issues:
Alleged short payment of duty on DTA sales exceeding permitted value, applicability of concessional rate under Notification No.23/03-CE, requirement of permission from Development Commissioner for DTA sales, imposition of penalty.

Analysis:

1. The appellant, a 100% EOU, engaged in manufacturing excisable items for export, was granted permission for DTA sales by the Development Commissioner. However, the appellant exceeded the permitted DTA sales value, leading to alleged short payment of duty. The department contended that DTA sales made without permission were not eligible for the concessional rate under Notification No.23/03-CE, resulting in a total alleged short payment of duty amounting to Rs.23,80,759 for the period up to 30.09.2008.

2. The appellant argued that their DTA sales satisfied the conditions for concessional rate under Notification No.23/03-CE, as they achieved positive NFE and the sales were within 50% of the FOB value of exports. They claimed that specific permission from the Development Commissioner was not required as long as these conditions were met. The appellant sought a waiver of pre-deposit for the duty demand, interest, and penalty, asserting a strong prima facie case.

3. The department opposed the appellant's plea, emphasizing the necessity of complying with the conditions prescribed for availing the concessional rate of duty. They highlighted that permission from the Development Commissioner was crucial, and the appellant had exceeded permitted DTA sales value without authorization. Therefore, the department maintained that the duty demand was correctly confirmed, along with the imposition of interest and penalty.

4. Upon considering both parties' submissions and reviewing the records, the Tribunal found that the appellant's DTA clearances exceeded the permitted value both before and after 31.03.2008, without explicit permission from the Development Commissioner. Consequently, the Tribunal held that the appellant failed to establish a prima facie case in their favor.

5. As a result, the Tribunal directed the appellant to deposit the full amount of the confirmed duty demand within 8 weeks. Upon compliance, the requirement of pre-deposit for interest and penalty would be waived, and recovery stayed pending the appeal's disposal. The appellant was instructed to report compliance by a specified date.

This detailed analysis of the judgment highlights the issues, arguments presented by both sides, and the Tribunal's decision based on the facts and legal provisions involved in the case.