2017 (5) TMI 880 - AT - Central Excise

100% EOU - DTA sale subject to permission from the Development Commissioner Noida SEZ - The Revenue authorities took the view that the goods cleared in DTA by the assessee were not conforming to the permission granted by the Development Commissioner for DTA sale - demand - whether the DTA clearance made by the assessee were in terms of the LOP granted by the Development Commissioner? - Held that - The DTA sale of finished products is permissible in terms of para 6.8 of the FTP 2009-14. The Development Commissioner has granted permissions for DTA sale from time to time on the basis of the export obligation fulfilled by the assessee in various Financial years - it is necessary for the Customs authorities to monitor and ensure that the concessional rate of duty in terms of notification no. 23/2003-CE is extended only to the goods cleared in DTA by the EOU within the limits specified by Development Commissioner. It is a corollary to the above statement that the limit upto which concession is permitted is required to be determined in the same terms in which the permission for DTA sale has been given by the Development Commissioner. The entitlement for concessional duty is required to be evaluated strictly in terms of the various permissions granted by the Development Commissioner. We note that in the impugned order dated 20.02.2015 the method adopted for determining the concessional duty benefit is not in accordance with the specific permissions granted by the Development Commissioner. We also note that the stand adopted by the Ld. Commissioner (A) in the impugned order dated 19.04.2016 is also strictly not in conformity with the DTA permission. The impugned orders are required to be set aside and the issue remanded back to the Ld. Jurisdictional Commissioner for re-determining the eligibility for the concessional N/N. 23/2003-CE strictly in terms of the permissions granted by the Development Commissioner - appeal allowed by way of remand.

Summary

Issues:
1. Challenge to Order-in-Original confirming duty demand for the disputed period.
2. Interpretation of permission for DTA sale granted by Development Commissioner.
3. Determination of eligibility for concessional duty under notification no.23/2003-CE.
4. Discrepancies in determining DTA sale entitlement based on specific products.
5. Compliance with permissions granted by Development Commissioner for DTA sale.

Analysis:
1. The appellant challenged the Order-in-Original confirming duty demand for the disputed period. The Revenue also filed an appeal against the dropping of duty demand for a different period. The issue revolved around whether the goods cleared in DTA by the appellant aligned with the permission granted by the Development Commissioner for DTA sale. The lower authorities scrutinized individual products' DTA sales, leading to discrepancies in entitlement to concessional duty under notification no.23/2003-CE.

2. The dispute primarily centered on the interpretation of the permission for DTA sale granted by the Development Commissioner. The Foreign Trade Policy (2009-14) outlined conditions for DTA sale, specifying limits and requirements for selling products similar to those exported. The permissions granted by the Development Commissioner for DTA sale were crucial in determining the eligibility for concessional duty, as supervised by Customs authorities.

3. The eligibility for concessional duty under notification no.23/2003-CE needed strict evaluation based on the permissions granted by the Development Commissioner. The tribunal noted discrepancies in the method adopted by the authorities in determining the concessional duty benefit, emphasizing the necessity to align the assessment with the specific permissions granted by the Development Commissioner for DTA sale.

4. The authorities' approach in determining DTA sale entitlement based on specific products was deemed inconsistent with the permissions granted by the Development Commissioner. The tribunal highlighted that the adjudicating authority and the Commissioner's stand were not in conformity with the DTA permissions, necessitating a reevaluation of the eligibility for concessional duty in line with the permissions granted.

5. Ultimately, the tribunal set aside both impugned orders and remanded the issue to the Jurisdictional Commissioner for a fresh decision. The Commissioner was directed to reevaluate the eligibility for concessional duty strictly in accordance with the permissions granted by the Development Commissioner for DTA sale. The decision allowed for the admission of additional evidence as per legal provisions, keeping all issues open for the fresh determination.