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2019 (5) TMI 1738 - AT - Central ExciseLevy of duty on 100% EOU - Clearance of goods who served from India Scheme License Holder, without payment of duty - case of the department is that there is no specific notification issued under Section 5A of Central Excise Act, 1944 - HELD THAT - It is clear that the excise duty in the case of goods supplied from 100% EOU should be equivalent to the Customs duty leviable on the goods if imported into India - In the present case also since the recipient is Served From India Scheme License Holder, if the goods is imported, will be eligible for exemption. Accordingly, the exemption available for the imported goods subject to fulfilment of the condition, if any prescribed, the supplies made by 100% EOU will also enjoy the same exemption. Appeal dismissed - decided against Revenue.
Issues:
1. Interpretation of Section 5A of Central Excise Act, 1944 for duty exemption. 2. Application of Serve From India Scheme to 100% Export Oriented Unit (EOU). 3. Comparison of excise duty on goods supplied from 100% EOU with Customs duty on imported goods. Analysis: Issue 1: Interpretation of Section 5A of Central Excise Act, 1944 for duty exemption The case involved goods cleared by the appellant without payment of duty under the Serve From India Scheme License. The department contended that without a specific notification under Section 5A, duty amounting to ?45,20,679/- was due, along with penalties. The Commissioner (Appeals) referred to relevant sections, notifications, and case laws, concluding that supplies from a 100% EOU are deemed imports eligible for the Serve From India Scheme. Consequently, the appeal was allowed, setting aside the original order. Issue 2: Application of Serve From India Scheme to 100% Export Oriented Unit (EOU) The Revenue argued that without an exemption notification under Section 5A, duty should be paid for goods cleared in the domestic market. However, the Tribunal noted that goods supplied from a 100% EOU should be subject to excise duty equivalent to Customs duty on imported goods. As the recipient was a Serve From India Scheme License Holder, eligible for exemption on imports, the same exemption applied to supplies from the 100% EOU. The Tribunal upheld the Commissioner (Appeals)'s decision, finding no error in the order. Issue 3: Comparison of excise duty on goods supplied from 100% EOU with Customs duty on imported goods The Tribunal clarified that excise duty on goods from a 100% EOU should mirror the Customs duty on imported goods. Given the eligibility for exemption under the Serve From India Scheme for imported goods, the same exemption should apply to supplies from the 100% EOU. The Tribunal found the Commissioner (Appeals)'s reasoning sound and dismissed the Revenue's appeal, upholding the impugned order. In conclusion, the Tribunal affirmed that goods supplied from a 100% EOU are akin to imports and should be treated accordingly under the relevant provisions, including the Serve From India Scheme exemption.
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