2024 (1) TMI 392 - AT - Central Excise

Demand of differential duty - duty short-paid by claiming that the goods cleared into the domestic tariff area (DTA) between June 2007 and September 2015 were similar to the goods exported by them - concession under N/N. 1/2011-CE dated 1st March 2011 as amended by notification no. 16/2012-CE dated 17th March 2012 - time limitation - HELD THAT - It is found that the eligibility for the exemption from additional duties of customs upto 2011, and concessional rate of duty thereafter under alternative notification, has been settled by the Hon ble Supreme Court in M/S. ESSILOR INDIA PVT. LTD. VERSUS COMMISSIONER OF CUSTOMS, BANGALORE 2016 (5) TMI 303 - SUPREME COURT which has held that the goods could not be treated as semi-finished and it could be appropriately described as to be finished spectacle lenses . Therefore, such lenses would clearly be treated as spectacle lenses and were xx entitled to exemption notification which view was taken by even the department itself for earlier years. The issue stands settle insofar as eligibility for concessional rate of duty in terms of notification no. 6/2006-CE dated 1st March 2006 is concerned. The question of eligibility in the environment in which that exemption was replaced by the one relied upon by appellant thereafter, viz., notification no. 1/2011-CE dated 1st March 2011 vis-a-vis the amendment effected to the tariff stricture would need to be examined in the light of the decision of the Hon ble Supreme Court. Time Limitation - HELD THAT - It is found that the notice, while having travelled beyond the normal period of limitation for a portion of the disputed period is quite possibly within the limitation period for the remaining. The details, however, needs to be ascertained and, in view of the finding in relation to the latter two of the four show cause notices, it may be appropriate for being decided afresh. The impugned order set aside and matter remanded for a fresh decision - The appeal is, accordingly, disposed off by partially modifying the impugned order and remanding the remaining part of the impugned order.

Summary

Issues involved:
The judgment concerns the challenge against confirmation of differential duty demanded in relation to 'spectacle lens' cleared into the 'domestic tariff area (DTA)' under the export oriented unit (EOU) scheme. The issues include eligibility for concessional rate of duty, classification of goods, applicability of notifications, time-barred notices, and imposition of penalty.

Eligibility for Concessional Rate of Duty:
The appellant contested the demand of differential duty amounting to Rs. 5,78,43,145, claiming that the goods cleared into the DTA were similar to those exported and thus eligible for concession under specific notifications. The central excise authorities classified the goods as 'semi-finished', leading to a proposed re-classification and denial of exemption under relevant notifications. The contention was based on the product's manufacturing process and the application of previous Tribunal decisions, which were later reversed by the Supreme Court.

Classification of Goods and Applicability of Notifications:
The judgment discussed the correctness of classification against the tariff item corresponding to the goods in the Central Excise Tariff Act, 1985. It also addressed the inclusion of additional duty of customs in computing aggregate duties, as per the Central Excise Act, 1944. The Supreme Court's ruling in Essilor India Pvt Ltd v. Commissioner of Customs, Bangalore was cited to establish the eligibility for exemption and concessional rate of duty for the goods in question.

Time-Barred Notices and Penalty Imposition:
The appellant argued that the second show cause notice issued was time-barred, but the Tribunal found it possibly within the limitation period for a portion of the disputed period. The judgment set aside the demand for the period up to March 31, 2011, and remanded the matter for fresh consideration in light of the Supreme Court's decision for the subsequent notification. The impugned order was partially modified, and the appeal was disposed of by remanding the remaining part for further review.