2018 (7) TMI 975 - AT - Central Excise

Valuation - DTA Sale - it was alleged that the value of plastic bags which were physically exported cannot be counted for computing DTA sale entitlement in respect of Plastic Agglomerates and Plastic Pellets (Granules), which were cleared for DTA sale, since plastic agglomerates/pellets are not similar to plastic bags - Held that - The Tribunal in the case of Amitex Silk Mills Ltd. 2007 (7) TMI 279 - CESTAT, AHMEDABAD has held that the raw materials were admittedly issued for manufacture in the 100% EOU and no raw materials as such has been diverted and hence demand of duty on the raw materials is not sustainable - for the purpose of DTA clearance, the value of deemed export is also to be considered as export. Third time payment of Education Cess and S&H Education Cess on the DTA clearance - Held that - Reliance placed in the case of SARLA PERFORMANCE FIBERS LTD. VERSUS COMMISSIONER OF C. EX., VAPI 2010 (2) TMI 335 - CESTAT, AHMEDABAD , where it was held that Education cess not payable for third time as contended by the department. Appeal allowed - decided in favor of appellant.

Summary

Issues involved:
1. Calculation of DTA sale entitlement based on exported goods.
2. Third-time payment of Education Cess and S&H Education Cess on DTA clearance.

Issue 1: Calculation of DTA sale entitlement based on exported goods:
The appeal involved a dispute regarding the calculation of DTA sale entitlement for M/s Aishwarya Plast Exports Pvt. Ltd. The first issue raised was whether the value of plastic bags physically exported could be counted for computing DTA sale entitlement in respect of Plastic Agglomerates and Plastic Pellets cleared for DTA sale. The Commissioner (Appeals) had held partially in favor of the appellant, allowing only 50% of total physical export to set the limit for DTA clearance. The appellant argued that they should be allowed to include the value of deemed export in the export calculation, citing precedents such as Surat Jari Pvt. Ltd., NBM Industries, and Nandan Synthetics Pvt. Ltd. The Tribunal, referring to the case of Amitex Silk Mills Ltd., held that for the purpose of DTA clearance, the value of deemed export should also be considered as export. Consequently, the impugned order was modified to include deemed export value in the DTA clearance calculation.

Issue 2: Third-time payment of Education Cess and S&H Education Cess on DTA clearance:
The second issue revolved around the charging of Education Cess and S&H Education Cess for the third time on DTA clearance. The Commissioner (Appeals) had relied on the decision of Sarla Polyester Ltd., but the appellant argued that a subsequent decision in the case of Sarla Performance Fibres Ltd. took a different view, which was upheld by the Hon'ble High Court of Gujarat and the Hon'ble Apex Court. Relying on the decision in the case of Sarla Performance Fibres Ltd., the Tribunal allowed the appeal on both counts, holding in favor of the appellant regarding the third-time payment of Education Cess and S&H Education Cess on DTA clearance.

In conclusion, the Tribunal, consisting of Dr. D.M. Misra, Member (Judicial), and Shri Raju, Member (Technical), allowed the appeal filed by M/s Aishwarya Plast Exports Pvt. Ltd. against the order of the Commissioner (Appeals) on the issues of calculating DTA sale entitlement and the third-time payment of Education Cess and S&H Education Cess on DTA clearance. The Tribunal directed the modification of the impugned order to include the value of deemed export in the DTA clearance calculation and ruled in favor of the appellant on both counts, based on relevant legal precedents and decisions.