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2018 (8) TMI 315 - AT - Central Excise100% EOU - Effect of notification - Additional Customs Duty (CVD) at the rate of 4% - Benefit of N/N. 29/2004-CE dated 09.07.2004 - denial of benefit on the ground that a notification issued under Section 5A of the Act cannot be made applicable to EOUs unless it is specifically provided in the notification, therefore according to Revenue, CVD has to be calculated @ 8% which is the tariff rate prescribed under the Central Excise Tariff Act. Held that - The issue is squarely covered by a recent decision of this Bench in COMMISSIONER OF CENTRAL EXCISE, SALEM VERSUS SRI GUGAN MILLS AND SARADHA TERRY TOWELS LTD. 2018 (6) TMI 908 - CESTAT CHENNAI , where it was held that For calculating the duty of excise for the purpose of discharging CVD liability, any notification issued in respect of the goods cleared by EOU also has to be taken into consideration. Appeal dismissed - decided against Revenue.
Issues:
1. Eligibility of a 100% EOU to benefit from Notification No.29/2004 for calculating Additional Customs Duty (CVD) at 4% while clearing finished goods to Domestic Tariff Area (DTA). 2. Interpretation of Section 5A(1) of the Central Excise Act regarding the applicability of exemptions to goods produced and cleared by a 100% EOU. 3. Comparison of duties payable by a 100% EOU with those on imported goods for clearances to DTA under Section 3(1) of the Central Excise Act. Analysis: Issue 1: The case involved a dispute over the eligibility of a 100% EOU to avail the benefits of Notification No.29/2004 for calculating CVD at 4% while clearing goods to DTA. The Revenue argued that the EOU should calculate CVD at 8% based on the tariff rate prescribed under the Central Excise Tariff Act. The Commissioner (Appeals) set aside the original order in favor of the respondent, leading to the Revenue's appeal. The Tribunal, after considering relevant precedents, upheld the Commissioner's decision, citing that the duty payable by a 100% EOU should be determined in the same manner as for imported goods, applying the relevant Customs and Excise Notifications. Issue 2: The interpretation of Section 5A(1) of the Central Excise Act was crucial in determining whether exemptions under this section are automatically applicable to goods produced and cleared by a 100% EOU. The Tribunal clarified that the proviso to Section 5A(1) does not automatically exempt goods produced by a 100% EOU, as the duty payable by such EOUs is equal to the aggregate of Customs duties. The Tribunal emphasized that the duty calculation for goods produced and cleared by a 100% EOU should consider the provisions of Section 3(1) and apply relevant Notifications for calculating CVD, as clarified in various judicial decisions. Issue 3: The comparison of duties payable by a 100% EOU with those on imported goods for clearances to DTA under Section 3(1) of the Central Excise Act was a key aspect of the judgment. The Tribunal highlighted that the duty payable by a 100% EOU should be determined in a similar manner as for imported goods, considering the exemptions under relevant Customs and Excise Notifications. By following established legal principles and previous judicial decisions, the Tribunal affirmed the Commissioner's decision and dismissed the Revenue's appeal, maintaining the lower appellate authority's order. In conclusion, the Tribunal's detailed analysis and reliance on precedents provided a comprehensive understanding of the issues involved, leading to the dismissal of the Revenue's appeal and upholding the decision in favor of the respondent.
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