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2016 (3) TMI 519 - AT - Central Excise100% EOU - whether the benefit of Central Excise (Removal of goods at concessional rate of duty for manufacture of Excisable goods) Rules, 2001 is available to 100% EOU - Held that - Appellant have cleared the goods under statutory provisions of Notification No. 43/2001 CE (NT) dated 26/6/2001 read with the provisions of Central Excise (Removal of goods at concessional rate of duty for manufacture of excisable goods) Rules, 2001. We agree with the Ld. Counsel that no restriction or prohibition is provided in the law for application of such provisions to 100% EOU. Under the above said provisions clearances are allowed without payment of duty only for the reason that the buyer undertakes to use the said duty free goods for manufacture of goods which would be exported. The contention of the show cause notice, objections of the Adjudicating authority that the restrictions provided under Section 5A, we are of the view that the appellant have not cleared the goods under any notification which was issued under Section 5A. The Notification No. 43/2001-CE (NT) and the provisions of Central Excise (Removal of goods at concessional rate of duty for manufacture of excisable goods) Rules, 2001 prescribed the procedure for clearance of the goods without payment of duty and the said notification was not under Section 5A, therefore contention of the Adjudicating authority is misleading. We are of the considered view that the demand confirmed by the Adjudicating authority is not sustainable.
Issues:
1. Confirmation of demand and penalty by the Commissioner of Central Excise & Customs. 2. Applicability of Notification No. 43/2001-CE (NT) to a 100% Export Oriented Unit. 3. Interpretation of Section 5A of the Central Excise Act regarding exemption notifications. 4. Validity of clearance of goods under bond for manufacture of export goods. Analysis: 1. The appeals were directed against the Order-in-Original confirming a demand of Rs. 38,61,804, imposing penalties, and holding individuals and companies liable. The appellant, a 100% Export Oriented Unit, was engaged in manufacturing various plastic products. The dispute arose when goods were supplied without duty payment under Notification No. 43/2001-CE (NT). The Commissioner contended that the appellant wrongly cleared goods for a buyer not exporting them, leading to penalties and demand confirmation. 2. The appellant argued that they cleared goods under bond following the provisions of Notification No. 43/2001-CE (NT) and Central Excise Rules, without availing any exemption under Section 5A. The appellant's position was that there was no legal restriction for supplying goods under these provisions to a 100% EOU. The Tribunal agreed, emphasizing that the appellant did not clear goods under any Section 5A notification, allowing clearances without duty for export-oriented manufacturing. 3. The Assistant Commissioner representing the Revenue reiterated the findings of the impugned order, focusing on the restrictions under Section 5A. However, the Tribunal found that the appellant complied with statutory provisions and rules for duty-free clearances, emphasizing that the restrictions under Section 5A did not apply to the appellant's case. Citing relevant judgments, the Tribunal highlighted that the appellant's actions were in line with legal provisions and previous decisions, ultimately setting aside the impugned order and allowing the appeals. 4. The Tribunal's decision was based on the understanding that the appellant's clearance of goods under bond for the manufacture of export goods, even without availing specific exemptions under Section 5A, was legally permissible. By referencing precedents and legal provisions, the Tribunal concluded that the demand confirmed by the Adjudicating authority was not sustainable, leading to the setting aside of the impugned order and allowing the appeals of the appellants.
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