2018 (2) TMI 1386 - AT - Central Excise

100% EOU - N/N. 23 of 2003-CE dated 31.03.2003 - Revenue held a view that Zinc powder cleared to DTA is not similar to Zinc ingots exported by the appellant and accordingly, denied the exemption - Held that - Admittedly, Zinc is manufactured by the appellant and exported in the form of ingots. Some of the zinc is cleared to DTA in the form of powder - there is no reason to deny the exemption to the appellant as the products cleared for export to DTA can be considered similar in absence of specific definition restricting the said scope of the said term - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Eligibility of exemption under Sl.No.2 of Notification No.23 of 2003-CE dated 31.03.2003 for goods cleared by an EOU into DTA.
2. Interpretation of the term "similar" in the context of goods cleared for export and into DTA.
3. Consideration of Zinc ingots and Zinc powder as similar goods for exemption eligibility.

Analysis:
The appeal before the Appellate Tribunal CESTAT NEW DELHI involved a dispute regarding the eligibility of an EOU, engaged in manufacturing Zinc ingots, for exemption under Sl.No.2 of Notification No.23 of 2003-CE dated 31.03.2003. The dispute centered around whether the Zinc powder cleared to DTA by the EOU was similar to the Zinc ingots exported by the appellant. The Revenue contended that Zinc powder and Zinc ingots were not similar goods, thus denying the exemption to the appellant.

In the appeal, the appellant argued that the form of the product, whether ingot or powder, should not affect their eligibility for exemption as the Ministry of Commerce's license referred to the product as Zinc without specifying the form. The appellant relied on the Tribunal's decision in Hindustan Motors Ltd. and the Apex Court's decision in Nat Steel Equipment Pvt. Ltd. to support their position.

On the other hand, the Revenue argued that Zinc ingots and Zinc powder were distinct and identified differently in the tariff classification, making them dissimilar goods for the purpose of extending the concession for DTA clearance. The Revenue supported the findings of the lower authorities in denying the exemption to the appellant.

The Tribunal analyzed the term "similar" in the context of goods cleared for export and into DTA. Referring to the Tribunal's decision in Hindustan Motors Ltd. and the Apex Court's decision in Nat Steel Equipment Pvt. Ltd., the Tribunal emphasized that the term "similar" does not require goods to be identical but rather corresponding to or resembling in many respects. Considering that Zinc was manufactured by the appellant and exported as ingots, with some cleared as powder to DTA, the Tribunal concluded that the products could be considered "similar" in the absence of a specific restrictive definition. Therefore, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant.

In conclusion, the Tribunal's decision clarified the interpretation of the term "similar" in the context of goods cleared for export and into DTA, emphasizing a broader understanding beyond mere identical classification. The judgment highlighted the importance of considering resemblance and general likeness in determining similarity for exemption eligibility, ultimately ruling in favor of the appellant based on the specific circumstances of the case.