2017 (3) TMI 126 - AT - Central Excise

100% EOU - additional duty of excise - duty not paid on goods produced in an EOU and allowed to be sold in India - Held that - against the same appellant on the identical issue this Tribunal has passed Order 2017 (1) TMI 546 - CESTAT MUMBAI wherein it was held that The levy of duty under section 3 of Central Excise Act, 1944 on clearances effected domestically includes all duties leviable under all the statutes relevant to imported goods and, hence, domestic area clearance cannot be excused from leviability - demand upheld - appeal dismissed - decided against appellant.

Summary

Issues:
Recovery of duty under Additional Duties of Excise Act and Special Additional Duty, imposition of penalty, confirmation of demand by adjudicating authority, eligibility for duty concession, levy of special excise duty, failure to establish eligibility for clearance at local manufacture rates, imposition of penalty under section 11AC of Central Excise Act.

Analysis:
The case involved M/s Hanil Era Textiles Ltd, a 100% EOU engaged in manufacturing various yarns falling under specific chapters of the Central Excise Tariff Act. They were issued a show cause notice seeking recovery of duty for a specified period due to non-payment of additional duty of excise and Special Additional Duty on clearances in the Domestic Tariff Area (DTA). The adjudicating authority confirmed the duty demand, levied interest, and imposed a penalty equal to the duty amount under the Central Excise Act.

Upon appeal, none appeared on behalf of the appellant, while the Revenue representative reiterated the findings of the impugned order. The Tribunal noted a previous order against the same appellant on a similar issue, where the appellant's contentions regarding domestic procurement of raw materials were not deemed sufficient for eligibility for duty concession. The Tribunal upheld the original authority's decision, emphasizing the lack of evidence supporting the appellant's claims and the compliance requirement for duty exemption.

Regarding the levy of special excise duty, the Tribunal observed no exemption granted for this tax element, emphasizing that duties applicable to imported goods must also apply to domestic clearances. The appellant's failure to establish eligibility for local manufacture duty rates was highlighted, with the Tribunal noting the appellant's choice to pay duties under an ineligible notification despite the requirement for compliance with duty concession conditions.

Ultimately, the Tribunal found no grounds to interfere with the impugned order, upholding the demand confirmed by the adjudicating authority. Citing a decision by a coordinate bench, the Tribunal deemed the demand sustainable, leading to the dismissal of the appeal and the upholding of the impugned order, including the penalty imposed under section 11AC of the Central Excise Act.

In conclusion, the Tribunal's decision affirmed the duty recovery, penalty imposition, and confirmation of demand by the adjudicating authority, emphasizing the importance of compliance with duty concession conditions and the applicability of duties to domestic clearances as per relevant statutes.