2017 (1) TMI 1281 - AT - Central Excise

100% EOU - maintainability of appeal - clearance of goods to DTA without proper permission - whether the issue involved is of rate of duty and whether the issue is maintainable or not? - Held that - reliance placed in the case of SARLA PERFORMANCE FIBERS LTD. Versus UNION OF INDIA 2012 (2) TMI 474 - BOMBAY HIGH COURT , where the Hon ble Supreme Court laying down the principle for determination of duty on clearance by an 100% EOU in DTA with out proper permission from the appropriate authority, for the period prior to the amendment to Sec.3(1) of CEA,1944 held that the expression allowed to be sold in India used in proviso to Section 3(1) of the Act would be applicable only to sales made in DTA of the production by 100% EOUs, which are allowed to be sold into India as per the provisions of the Exim Policy - appeal dismissed - decided against appellant.

Summary

Issues:
- Determination of duty on clearance by an 100% EOU in DTA without proper permission
- Interpretation of Section 3(1) of the Central Excise Act, 1944
- Applicability of circulars in determining excise duty liability
- Review of previous tribunal decisions and binding precedents

Analysis:

The judgment pertains to appeals filed by an appellant-assessee and the Revenue against a common Order-in-Original. The appellant-assessee, an 100% EOU, cleared goods in DTA without proper permission, leading to a demand notice for recovery of central excise duty under relevant provisions. The demand was confirmed along with penalties. The matter went through various stages of appeal, including a difference of opinion within the Tribunal and a subsequent High Court dismissal, ultimately reaching the Honorable Supreme Court.

The Honorable Supreme Court, in a settled case, quashed the impugned orders and remanded the matter to compute the demand as per the main provision of Section 3(1) of the Central Excise Act, 1944. Both the appellant's advocate and the Revenue's representative did not dispute this submission.

The Supreme Court laid down principles for determining duty on clearance by an 100% EOU in DTA without proper permission, particularly for the period before an amendment to Section 3(1) of the Act. The Court emphasized the necessity of authorization from the Development Commissioner for such clearances. Additionally, the judgment discussed the relevance of circulars and their alignment with legal precedents, highlighting the binding nature of certain decisions on all courts and tribunals.

Ultimately, the appeals were allowed, and the previous orders were set aside. The appellant was directed to pay excise duty as per Section 3(1) of the Act, with instructions for the competent authority to compute the duty accordingly. The judgment rendered the appeals filed by the appellant and the Revenue infructuous, resulting in their disposal.