2018 (8) TMI 356 - AT - Central Excise

100% EOU - it was alleged that that the appellant had failed to physically export stamper for CD admitted the fact that the appellant had cleared stamper for CD on payment of concessional rate of duty in the domestic tariff area under the permission granted by the deputy / joint Development Commissioner, KSEZ Gandhidham - concessional rate of duty. Held that - The appellant themselves treated both types of goods i.e. Stamper (Mother DVD) and CD/ CD-R as different goods and for that reason only they have obtained the permission for clearance of 50% of stamper in the DTA market vide development Commissioner s Letter dated 20.12.2002, the said permission carrying the clear condition of adjustment of facility against future entitlements. Thereafter, when the appellant could not made export of stamper the 50% of FOB value for DTA clearance was not complied with. Since the appellant could not have adjusted the facility of DTA clearance against export of CD/ CD-R they kept on taking extension for that purpose from the Development Commissioner. Therefore, the appellant themselves treated CD/ CD-R and Stamper as a different goods. Now their stand that both are similar goods is contrary to their own stand and on the fact - the nature of goods i.e. stamper and the CD/ CD-R are clearly distinct. The stamper is used for making the CD/ CD-R whereas CD/ CD-R is loaded CD with the media/ data, therefore, both are completely distinct products. In the present case, it is an advanced DTA permission with specific conditions that the appellant will fulfill the condition of export of the similar goods and same will be adjusted in the future entitlements, therefore, in failure to comply with the said condition, the benefit of the said permission of the Development Commissioner is not available to the appellant. Extended period of limitation - Held that - The appellant themselves opted for advanced DTA permission subject to condition that they will fulfill the condition of export in future and they themselves taken the extension for fulfilling the condition which has been extended upto 31.05.2004 by the Development Commissioner and as per letter dated 28.03.2003 the Development Commissioner allowed the two years from 06.12.2004 for adjustment of the DTA sale value - The SCN was issued on 26.06.2007 when it was found that the appellant could not comply with the condition of adjustment of value of DTA clearance since no export of stamper could be made, therefore, the SCN cannot be said to have been issued as time bar. Appeal dismissed - decided against appellant.

Summary

Issues:
1. Failure to comply with export conditions for concessional duty rate on stamper for CD.
2. Dispute over similarity of stamper for CD and CD/CD-R.
3. Applicability of judgments on permission granted by Development Commissioner.
4. Time-barring of demand due to delayed issuance of Show Cause Notice (SCN).

Issue 1: Failure to comply with export conditions for concessional duty rate on stamper for CD

The appellant, a 100% EOU engaged in CD manufacturing and export, was granted permission for broadbanding to include stamper production subject to exporting the additional production. However, the appellant admitted to clearing stamper for CD domestically without fulfilling the export requirement. The appellant had availed duty-free imports and procured raw materials for export but failed to export the stamper as mandated. Consequently, a demand for differential duty was confirmed through an adjudication order, leading to the present appeal.

Issue 2: Dispute over similarity of stamper for CD and CD/CD-R

The appellant argued that since they were exporting CD/CD-R, the criteria for stamper clearance should be based on the FOB value of CD/CD-R exported. They contended that stamper for CD is similar to CD/CD-R, citing a Supreme Court judgment. Additionally, they relied on a Tribunal case to support their claim that permission granted by the Development Commissioner should entitle them to the benefit of the Notification. However, the revenue department maintained that stamper and CD/CD-R are distinct products with different uses, emphasizing that the export condition was not met despite extensions granted for compliance.

Issue 3: Applicability of judgments on permission granted by Development Commissioner

The Tribunal noted that the appellant themselves treated stamper and CD/CD-R as different goods, as evidenced by permissions for DTA clearance of stamper with conditions for future adjustments. Despite extensions provided by the Development Commissioner, the appellant failed to export stamper, thereby not complying with the export condition. The Tribunal differentiated this case from the cited judgments, emphasizing the distinct nature and use of stamper and CD/CD-R. The Tribunal upheld the impugned order, dismissing the appeal based on the failure to meet export conditions and the specific terms of the advanced DTA permission.

Issue 4: Time-barring of demand due to delayed issuance of Show Cause Notice (SCN)

Regarding the time limitation, the appellant argued that the demand was time-barred due to the delayed issuance of the SCN. However, the Tribunal found that the appellant had voluntarily accepted advanced DTA permission with extended deadlines for compliance. As the appellant could not fulfill the export condition within the extended period, the SCN issued later was deemed not time-barred. The Tribunal concluded that the judgments cited by the appellant on limitation were not applicable in this case, given the specific conditions and extensions granted by the Development Commissioner.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT AHMEDABAD highlights the key legal issues, arguments presented by both parties, and the Tribunal's findings on each aspect of the case.