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2014 (5) TMI 167 - AT - Central ExciseDTA clearances of the cut-flowers (non-excisable goods) - cut flowers grown by 100% EOU and cleared for DTA sales - Custom Duty on the inputs used in the production of those cut-flowers - whether the Custom Duty payable on the inputs used in the production of the cut- flowers which had been cleared to DTA, is to be taken as an amount equal to Custom Duty chargeable on the import of cut- flowers, as such, or it should be the actual Custom Duty on the inputs used in the production of cut- flowers cleared to DTA - Held that - as per Notification 126/94-CUS., as it existed at that time, Custom duty was equal to the Customs Duty chargeable on the import of cut-flowers, as such words in an amount equal to the Custom Duty leviable on such articles, as if imported, as such mentioned in Notification ibid should be read as it is so, custom duty on import of Cut flowers is rightly charged - Following decision of LR. BROTHERS, INDO FLORA LTD. Versus COMMISSIONER OF CUSTOMS, MEERUT 2008 (7) TMI 288 - CESTAT, NEW DELHI - Decided in favour of Revenue.
Issues:
Settlement of Customs duty on cut flowers grown by 100% EOU and cleared for DTA sales. Analysis: The appeal was taken up for disposal in the absence of the respondent as they did not appear despite multiple listings. The Commissioner (Appeals) based the decision on the case of Cut Flower Unit M/s Cosco Blossoms Pvt. Ltd., stating that Customs duty is not demandable on cut flowers by 100% EOU cleared for DTA sales. It was further held that as cut flowers are non-excisable, Central Excise duty is not sustainable. However, the issue was settled in the case of L.R. Brothers, Indo Flora Ltd. vs. CC, Meerut, where it was clarified that DTA clearance of cut-flowers attracts Custom Duty on the inputs used in production, not on the cut flowers themselves. The dispute was regarding the calculation method of Custom Duty on inputs used in production for DTA clearance. The Notification No. 126/94-CUS. contained provisions for determining Custom Duty on inputs used in production of non-excisable goods cleared to DTA. The Notification was amended with effect from 18-5-01, changing the calculation method from being equal to the Custom Duty on finished goods to an actual basis. The Tribunal clarified that the Customs Duty charged was on the inputs used in production, not on the cut flowers themselves. The judgments in the cases of Vikram Ispat, Zygo Flowers Ltd., and Cosco Blossoms Pvt. Ltd. were examined to interpret the wording of the exemption notification during the dispute period. The Tribunal concluded that the Custom Duty charged on DTA clearance of cut flowers was correct as per the provisions of the Notification during the dispute period. The Tribunal's ratio was found fully applicable to the present case, setting aside the impugned orders and allowing the appeals filed by the Revenue. The judgment emphasized the importance of interpreting statutes without adding or subtracting words to avoid making any part of the statute redundant. In summary, the Tribunal upheld the Custom Duty charged on the inputs used in the production of cut flowers cleared for DTA sales, dismissing the appeal and allowing the Revenue's appeals based on settled legal principles and statutory interpretation.
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