2018 (9) TMI 559 - AT - Central Excise

100% EOU - Refund claim - deemed exports - for the purpose of 50% of DTA clearance, in respect of 100% EOU, whether the deemed exports should be considered as exports or only the physical exports should be considered? Held that - The issue is no more res-integra as in the cases of M/s. Ginni International Limited, 2007 (8) TMI 649 - SUPREME COURT OF INDIA , the Hon ble Supreme Court held that for the purpose of calculation of 50% of export, the export will include the deemed export also - impugned order set aside. As regards the demand of duty on raw materials, since the demand on the finished goods itself is not sustainable the duty on raw material is also not sustainable. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether deemed exports should be considered for the purpose of 50% of DTA clearance for 100% EOU or only physical exports should be considered.

Detailed Analysis:
The main issue in the present case revolved around determining whether deemed exports should be taken into account for the purpose of calculating 50% entitlement for DTA clearance for 100% EOU, or if only physical exports should be considered. The appellant's advocate, Shri S.J. Vyas, argued that the Hon'ble Supreme Court had addressed this issue in various judgments, emphasizing that deemed exports should be included in the calculation. He cited several cases to support his argument, such as Amitex Silk Mills Pvt. Limited, Chirag Prints, and Ginni International Limited, among others.

In contrast, the Deputy Commissioner (AR), Shri Amit Kumar Mishra, relied on different judgments like Jumbo Bags Limited vs. CC, Chennai, and Indoworth India Limited vs. CCE, to support the findings of the impugned order. However, upon careful consideration of the arguments presented by both sides, the Tribunal found that the issue was no longer res-integra. Referring to previous judgments involving M/s. Ginni International Limited and Sri Sarith Synthetics & Industries Pvt. Limited, the Tribunal concluded that deemed exports should indeed be considered for calculating the 50% entitlement for DTA clearance. Consequently, the impugned order was deemed unsustainable and set aside, leading to the allowance of the appeals.

Additionally, concerning the demand for duty on raw materials, the Tribunal ruled that since the demand on the finished goods was not sustainable, the duty on raw materials was also not sustainable. Hence, the duty on raw materials was set aside along with the impugned order. Ultimately, the appeals were allowed, and the Tribunal pronounced its order in the open court, bringing the case to a close.