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2022 (7) TMI 89 - HC - Central ExciseAdjustment of amount of the duty demanded against the EOU unit - the DTA unit and the EOU unit - goods manufactured in EOU sold in DTA unit - there is only single legal entity (i.e. Petitioner-company) who merely possesses separate registrations - double taxation or not - HELD THAT - The petitioner should pay the entire amount and claim refund of Rs.7,31,58,191/-. According to respondent no.2, the DTA unit and the EOU unit are independent of each other and, therefore, petitioner cannot claim adjustment / credit for the amount, which was paid to the DTA unit for the liability of the EOU. At the same time, in the impugned order, respondent no.2 says that the duty liability under Excise Act devolves on manufacturer of goods. In our view, the manufacturer of goods is petitioner as a corporate legal entity. Petitioner was having two separate units, one for manufacturing the goods for exports without payment of excise duty and one for domestic consumption to the DTA - It can be accepted that both are separate units and separate entities. It is not disputed anywhere or denied that petitioner has not paid Rs.7,31,58,191/- but according to respondent no.2, the EOU was not entitled to discharge the duty payable of DTA clearances from Cenvat credit, but the duty discharge by DTA unit in this case was substantially from Cenvat credit account and only partly from the current account. The stand of respondent no.2 cannot be accepted that even though petitioner has already paid Rs.7,31,58,191/- through the DTA unit, the amount should once again be paid through the EOU unit and petitioner should apply for a refund of the amount paid through the DTA unit. If petitioner is compelled to do that, it would only mean that petitioner has to pay the said amount twice and then claim refund. Abatement on account of applicability of Notification No.23 of 2003 - HELD THAT - On the first point of suspension, in the final order itself, respondent no.2 admits that the DTA permission granted was not yet cancelled for the amended period and only a show-cause notice has been issued proposing to cancel the DTA and show-cause notice was still pending. In the petition also there is an averment that the show-cause notice was still pending. Therefore, that could not have been the basis to deny the abatement of Rs.36,80,850/-. Achievement of positive NFE - HELD THAT - Respondent no.5 through one P. S. Raman, Deputy Development Commissioner, has filed an affidavit affirmed on 5th October, 2012, in which there is a positive averment that appellant had achieved positive NFE as per the details submitted in the DTA Sale. It is also stated that DTA Sale permissions were issued to the unit only after ascertaining the fact that the unit has achieved positive NFE. Therefore, petitioner will be entitled to the abatement on account of applicability of Notification No.23 of 2003. Petition disposed off.
Issues involved:
1. Impugning orders passed by the Settlement Commission, Customs and Central Excise. 2. Change of petitioner's name and status from Public Company to Private Company. 3. Establishment of domestic and Export Oriented Units (EOU) by the petitioner. 4. Dispute over excise duty liability for goods manufactured by EOU and sold in Domestic Traffic Area (DTA). 5. Central Excise Duty demand against the petitioner and disputed amounts. 6. Dispute over the adjustment of duty paid by DTA unit against EOU duty liability. 7. Denial of abatement under Notification No. 23 of 2003. 8. Judicial review of the orders passed by the Settlement Commission. Detailed Analysis: 1. The petitioner challenged the final order passed by the Settlement Commission regarding excise duty liability. The petitioner's name and status change were acknowledged, and the amendment to the cause title was permitted. 2. The petitioner had established a domestic unit and an EOU for manufacturing goods, leading to a dispute over excise duty liability for goods sold in DTA. 3. The investigation revealed that goods manufactured by the EOU were sold in DTA as if produced by the domestic unit, resulting in a lower excise duty payment. 4. The Central Excise Duty demand against the petitioner was contested, with specific amounts disputed and reasons provided for each disputed amount. 5. The Settlement Commission accepted some disputed amounts but disagreed on the adjustment of duty paid by the DTA unit against the EOU duty liability. 6. The denial of abatement under Notification No. 23 of 2003 was also challenged, citing discrepancies in the reasons provided by the Commission. 7. The Court disagreed with the Commission's stance on the duty payment adjustment and abatement denial, ruling in favor of the petitioner. 8. The Court allowed the petition, quashing the orders passed by the Commission and directing the return of the bank guarantee provided by the petitioner. 9. The judgment concluded with instructions for the respondents to verify payment amounts and take necessary steps if discrepancies were found.
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