2011 (10) TMI 530 - AT - Central Excise

EOUs/EHTP/STP Units - clearance of goods to DTA - Held that - Goods exported namely Bearing Housing Assembly is not similar to goods cleared in the DTA namely Turbine Wheels. Similar goods are goods which although not alike in all respects have like characteristics and like component material which enable them to perform the same function and make them commercially interchangeable. Similar goods are also expected to have similar quality, reputation and trademark. Prima facie, we find that Bearing Housing Assembly and Turbine Wheels have different characteristics; different functions and they are not commercially interchangeable. The appellants have not demonstrated before us any similarity between these two products besides blankly stating that both are components of Turbo chargers - appellants have not made out a prima facie case for complete waiver of the pre-deposit - Conditional stay granted.

Summary

Issues:
1. Interpretation of concessional rate of duty under Notification No. 23/2003-C.E.
2. Whether Bearing Housing Assembly and Turbine Wheels are similar for DTA clearance.
3. Applicability of extended period of limitation for informing about raw material usage.
4. Grounds for complete waiver of pre-deposit.

Analysis:
1. The case involved the interpretation of the concessional rate of duty under Notification No. 23/2003-C.E. The department contended that the appellants could only clear Turbine Wheels in the DTA up to 50% of the FOB value of exports of Turbine Wheels. The impugned demand was confirmed by the adjudicating Commissioner due to the alleged discrepancy in the clearance of goods. The department argued that the concessional rate of duty applied only if the goods were manufactured fully out of imported raw materials, which the appellants had not informed the department about.

2. The appellants claimed that Bearing Housing Assembly and Turbine Wheels were similar and should be treated as such for DTA clearance purposes. However, the tribunal found that the two items were distinct and not commercially interchangeable. The appellants failed to demonstrate any similarity between the products besides stating that both were components of Turbo chargers. Therefore, the tribunal ruled against the appellants on this issue.

3. Regarding the extended period of limitation for informing about the usage of raw materials, the tribunal found that the department was justified in invoking the extended period. The appellants had not disclosed the use of both indigenous and imported raw materials, which was a requirement under the notification. The tribunal did not find any merit in the appellants' argument of financial hardship and upheld the department's decision on this matter.

4. The tribunal concluded that the appellants had not made out a prima facie case for a complete waiver of the pre-deposit. They were directed to pre-deposit 50% of the duty amount within eight weeks and report compliance four weeks thereafter. The pre-deposit of the balance amount was waived subject to compliance, and recovery was stayed during the appeal's pendency. The order was pronounced on 7-10-2011 by the tribunal.