2017 (4) TMI 790 - AT - Central Excise

100% EOU - refund claim - rejection on the ground that the concept of cum-duty is not applicable to the DTA clearances made by EOUs - Held that - Assessee made straight forward clearances from the EOU to DTA, though at lower rate of duty discharged thereon than what was applicable. It is not the case of the department that respondent-assessee had removed the goods clandestinely or that they had collected from or reimbursed by, the buyers, the amount of differential duty that was paid by them subsequently on being advised by department. Respondent-assessee has also not collected differential duty which they retained and paid up only on being advised by Department - it is an admitted fact that assessee had not collected any duty amount of more than 12.36% from their buyers. In these circumstances, the price charged by the respondent-assessee will surely have to be adopted as a cum duty price . Appeal dismissed - decided in favor of assessee.

Summary

Issues:
- Interpretation of proviso to Section 3(1) of the Central Excise Act, 1944 regarding duty payable on DTA clearances by an EOU.
- Applicability of cum-duty price concept to DTA clearances made by EOUs.
- Dispute over calculation of duty on DTA clearances and the correctness of the impugned order.
- Allegation of clandestine removal and its relevance to the present case.
- Examination of transaction value, cum-duty price, and the duty payable by the assessee.
- Consideration of various legal precedents and tribunal decisions in determining the duty liability of the assessee.

Analysis:
- The case involved a dispute regarding the duty payable on DTA clearances by an EOU under the proviso to Section 3(1) of the Central Excise Act, 1944. The appellant-Revenue contended that the duty should be calculated based on aggregate customs duties, while the respondent-assessee argued that the duty was central excise duty, not customs duty.
- The tribunal analyzed the provisions of the Central Excise Act and Customs Act to determine the duty liability. It was established that duty on DTA clearances by EOUs should be calculated as per the proviso to Section 3(1) of the Central Excise Act, irrespective of the method of calculation.
- The tribunal referred to legal precedents, including the Kumar Arch Tech Pvt. Ltd. case, to support the view that duty on DTA clearances is central excise duty and not customs duty. The concept of cum-duty price was found applicable in this context.
- The tribunal distinguished the present case from instances of clandestine removal, emphasizing that the assessee had made transparent clearances and paid duty at a lower rate initially. The duty liability was determined based on the price charged by the assessee, considering it as a cum-duty price.
- Various legal decisions and Supreme Court rulings were cited to support the tribunal's findings on duty calculation, transaction value, and the exclusion of duty elements from the wholesale price.
- Ultimately, the tribunal dismissed the department's appeal, finding it devoid of merit based on the discussions and analysis presented. The order was pronounced in court on a specific date.

This comprehensive analysis of the judgment highlights the key issues, legal interpretations, arguments presented by both parties, relevant legal precedents, and the tribunal's final decision based on the facts and legal provisions involved in the case.