2016 (11) TMI 409 - AT - Central Excise

Refund - EOU - EPCG licence - Held that - the Policy circular dated 13.5.2005 issued by DGFT which states that the matter has been consulted with CBEC and it is clarified that the goods cleared from EOU under EPCG scheme would attract central excise duty which are aggregate of effective customs duty leviable on like goods imported i.e. duty calculated after applying end use based notification and as per circular dated 15.9.1994 issued by CBEC - It was clarified that EOU can clear the goods under EPCG scheme at concessional rate of duty and there is no requirement for any other separate exemption notification in this regard. Regarding the refund of duty on finished goods, cleared for DTA, the contention of the Revenue is that during the period between date on which no dues certificate issued by the Customs and date of final de-bonding order of the Development Commissioner, unit shall not entitled to claim any exemption for procurement of capital goods or inputs - Decided in favor of the assessee.

Summary

Issues:
Refund of duty on indigenously procured machinery and spares under EPCG scheme, duty calculation of consumables and packing materials, refund of duty on finished goods cleared for DTA.

Refund of Duty on Indigenously Procured Machinery and Spares under EPCG Scheme:
The Revenue contended that without an exemption notification under Central Excise for the EPCG scheme, no concession can be granted. However, the tribunal found that EOU, upon de-bonding, sought to avail the concession available to EPCG license holders for capital goods in their possession. Referring to the Policy circular dated 13.5.2005, it was clarified that goods cleared under EPCG scheme from EOU attract central excise duty based on effective customs duty levied on similar imported goods. The tribunal upheld the impugned order, stating that no separate exemption notification was required for clearance under EPCG scheme.

Duty Calculation of Consumables and Packing Materials:
The tribunal affirmed the correctness of using the date of final de-bonding for duty calculation concerning consumables and packing materials. It was established that the duty on finished goods cleared for DTA was paid by the respondent on 24.1.2005, with de-bonding approved four days later. The tribunal noted that duty was correctly paid by the respondent, as duty liability arises only at the time of final de-bonding, aligning with the assessing officer's calculation based on available stock. Consequently, the tribunal found no error in the Commissioner (Appeals) order.

Refund of Duty on Finished Goods Cleared for DTA:
Regarding the refund of duty on finished goods cleared for DTA, the Revenue argued that no exemption could be claimed between the issuance of the no dues certificate and the final de-bonding order. The tribunal observed that the duty was indeed paid by the respondent on finished goods in stock on 24.1.2005, and de-bonding approval followed shortly after, indicating correct duty payment. With the approval for de-bonding granted on 7.12.2004, the duty calculation based on stock availability was deemed appropriate by the tribunal. Consequently, both appeals by the Revenue were dismissed, along with the disposal of cross-objections filed by the respondents.