2020 (9) TMI 660 - AT - Customs

100% EOU - benefit of exemption Notification No. 53/97- Cus dated 3.6.1997 - benefit denied observing that the respondent had not procured the necessary permission from the competent authority i.e. Development Commissioner to clear the goods in DTA by availing the concessional benefit under EPCG Scheme - whether the respondents are to be denied the benefit of exemption Notification No. 53/97-Cus dated 3.6.1997, allowed at the time of import two DG Sets in 1997, on clearance of said two DG Sets on being obsolete in DTA to EPCG License holders at concessional rate of duty? HELD THAT - The adjudicating authority simply denied the benefit of Notification No. 53/07-Cus dated 3.6.1997 observing that the respondent had not procured the necessary permission from the competent authority i.e. Development Commissioner to clear the goods in DTA by availing the concessional benefit under EPCG Scheme. The learned Commissioner (Appeals) has elaborately dealt with the said finding of the adjudicating authority. After applying the Circular issued from time to time, the learned Commissioner (Appeals) has held that the appellants have cleared the 2 DG Sets in question bearing Sl. No. 2DN-00890 and DN-00915, under due permission for clearance into DTA as granted/permitted by the Development Commissioner, SEEPZ, vide letter No. SEEPZ/28/EOU/77/99-2000/ Vol-III/6876 dated 19.08.2004. I also hold that the appellants have fulfilled the conditions laid down in the said letter that (i) the appellants shall maintain the stipulated export obligation and NFE; and (ii) the appellants shall pay the applicable rate of duty on the value assessed by the Customs/Central Excise authorities. I further find that the appellants are eligible for the concessional rate of duty on the clearances effected to EPCG License holder unit. No contrary evidence has been produced by the Revenue to rebut the aforesaid findings of the learned Commissioner (Appeals) - there are no merit in the appeal filed by the Revenue - appeal dismissed - decided against Revenue.

Summary

Issues:
Whether the appellant is entitled to the benefit of exemption Notification No. 53/97-Cus dated 3.6.1997 for clearing two DG Sets in DTA to EPCG License holders at a concessional rate of duty.

Analysis:
The case involves an appeal by the Revenue against an order passed by the Commissioner of Central Excise (Appeals), Mumbai-I. The respondents, engaged in manufacturing, imported two DG Sets and later sought permission to dispose of them in DTA to an EPCG License holder. The Revenue contended that the necessary permission was not obtained, leading to a demand for duty payment. The Commissioner (Appeals) allowed the appeal, prompting the Revenue's appeal.

The key issue was whether the respondents were rightfully denied the benefit of the exemption Notification No. 53/97-Cus dated 3.6.1997 for clearing the DG Sets in DTA to EPCG License holders at a concessional rate of duty. The adjudicating authority denied the benefit citing lack of permission from the Development Commissioner. However, the Commissioner (Appeals) analyzed circulars and permissions granted, concluding that the appellants complied with conditions and were eligible for the concessional rate of duty.

The Tribunal upheld the Commissioner's decision, noting that the Revenue failed to provide contrary evidence. Referring to a similar case, the Tribunal emphasized that clearances by 100% EOUs to EPCG units should be treated as imports for duty calculation purposes. The Tribunal highlighted that circulars clarified the applicability of concessional duty rates to clearances by EOUs, and the principles were approved by the Supreme Court.

In conclusion, the Tribunal found no merit in the Revenue's appeal, upholding the Commissioner's decision and dismissing the Revenue's appeal. The judgment was pronounced on 11.09.2020.