2001 (9) TMI 165 - AT - Central Excise

Summary

Issues Involved:
1. Entitlement of DTA sales for a 100% EOU.
2. Interpretation of "FOB value of exports" in EXIM Policy.
3. Validity of permissions granted by the Development Commissioner.
4. Applicability of Notification No. 8/97-C.E.
5. Authority of Central Excise Officers under Rule 100A.

Summary:

1. Entitlement of DTA Sales for a 100% EOU:
M/s. Ginni International Ltd., a 100% Export Oriented Undertaking (EOU), was aggrieved by the Adjudication Order confirming the demand of Central Excise duty and imposing a penalty for sales made to the Domestic Tariff Area (DTA). The Appellants argued that their DTA sales were within the permissible limits as per para 9.10 and 9.9(b) of the Export-Import Policy, 1997-2000, which allows EOUs to sell up to 50% of the FOB value of exports in DTA.

2. Interpretation of "FOB Value of Exports" in EXIM Policy:
The Appellants contended that the term "FOB value of exports" includes both physical and deemed exports, as supported by various paragraphs of the EXIM Policy and Handbook of Procedures. They argued that the Development Commissioner had granted permission considering both physical exports and supplies to other EOUs as deemed exports.

3. Validity of Permissions Granted by the Development Commissioner:
The Appellants emphasized that the Development Commissioner is the proper authority to grant permission for DTA sales, and once such permission is obtained, it cannot be questioned by the Central Excise Authorities. They relied on precedents where the Tribunal held that permissions granted by authorities outside the Department should not be disputed by the Revenue.

4. Applicability of Notification No. 8/97-C.E.:
The Appellants argued that they complied with Notification No. 8/97-C.E., which provides concessional duty for goods sold in India under specific provisions of the EXIM Policy. They contended that the notification's requirement was satisfied once the Development Commissioner granted permission for DTA sales.

5. Authority of Central Excise Officers under Rule 100A:
The Revenue argued that only physical exports should be considered for DTA sale entitlement and that Rule 100A empowers Central Excise Officers to examine the conditions for removing goods. However, the Tribunal found that the Development Commissioner had issued the necessary authorization, and the Revenue should have taken up any issues with the Development Commissioner rather than disallowing the clearance and demanding duty.

Conclusion:
The Tribunal concluded that the Appellants had complied with the necessary conditions and permissions for DTA sales. The Revenue could not dispute the value of clearance allowed by the Development Commissioner. The impugned order was set aside, and the appeal was allowed.