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2015 (3) TMI 295 - AT - Central ExciseLevy of Central Excise duty on the DTA clearances - Held that - Section 3 of the Central Excise Act provides that the duties of excise which shall be levied and collected on any excisable goods manufactured by a 100% EOU shall be an amount equal to aggregate of the duties of Customs which would be leviable on like goods produced or manufactured outside India and if imported into India. Therefore, the law is very clear. What is charged on domestic clearances by 100% EOU is duty of excise. In this case the goods namely cut flowers are non-excisable. The judgments cited by the Commissioner support this obvious interpretation of Section 3. Revenue s appeals on the ground that the Notification provides otherwise is not acceptable because a Notification cannot override the basic provision of law for charging duty. Revenue s reference to Cosco Blossoms Pvt. Ltd. (2003 (12) TMI 114 - CESTAT, NEW DELHI) to justify the duty can be demanded on imported inputs is totally mis-placed and uncalled for because what was demanded in the show-cause notice is Central Excise duty. - Decided against Revenue.
Issues:
Appeal against order setting aside duty demands and penalties on cut flowers cleared by a 100% EOU into DTA. Analysis: The appeal before the Appellate Tribunal CESTAT MUMBAI involved challenging an order by the Commissioner (Appeals) that set aside duty demands and penalties amounting to Rs. 21,68,083/- and Rs. 9,83,347/- against a company for clearing cut flowers grown by their 100% Export-Oriented Unit (EOU) into the Domestic Tariff Area (DTA). The Commissioner (Appeals) ruled that cut flowers are non-excisable, and neither Customs duty nor Central Excise duty is applicable on such clearances into DTA. This decision was based on precedents like VikramIspat V. CCE, Mumbai III and Cosco Blossoms Pvt. Ltd. Vs. Commissioner of Customs, Delhi, which clarified that only Central Excise duty is chargeable on DTA clearances by 100% EOUs under Section 3 of the Central Excise Act, 1944. The Revenue, represented by the learned A.R., contested the Commissioner's decision by referring to Notification No. 126/94-Cus, emphasizing that duty exemptions apply to goods used for production or manufacture, even if not exported, subject to conditions specified by the Development Commissioner. Additionally, the Revenue relied on a previous case where the Tribunal stated that duty could be demanded on imported inputs used in production. However, no representation was made by the respondent during the proceedings. After considering the arguments and case details, the Tribunal, led by P S Pruthi, concluded that the demand in question was for Central Excise duty on DTA clearances by the 100% EOU. Section 3 of the Central Excise Act mandates that duty on goods manufactured by a 100% EOU should be equivalent to the Customs duties on similar goods produced outside India. As cut flowers are non-excisable, the duty applicable on domestic clearances by 100% EOUs is excise duty. The Tribunal dismissed the Revenue's appeals, stating that a Notification cannot override the fundamental provision of law for duty imposition. The Tribunal also clarified that the reference to demanding duty on imported inputs was irrelevant in this case, as the demand was for Central Excise duty, not Customs duty. In conclusion, the Tribunal upheld the Commissioner (Appeals) decision, dismissing the Revenue's appeals and disposing of the respondent's Cross Objections accordingly.
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