2003 (5) TMI 169 - AT - Central Excise

Issues Involved:
1. Applicability of Notification No. 30/97-Cus. to goods cleared by a 100% EOU.
2. Extension of Notification No. 28/2001-C.E. to earlier Notification No. 82/92-C.E.
3. Recovery of interest and imposition of penalty under the Central Excise Rules.
4. Retrospective application of clarificatory notifications.

Issue-Wise Detailed Analysis:

1. Applicability of Notification No. 30/97-Cus. to Goods Cleared by a 100% EOU:
The Tribunal examined whether the provisions of Notification No. 30/97-Cus., dated 1-4-97, could be extended to goods cleared by a 100% EOU. It was concluded that Notification No. 30/97-Cus., issued under Section 25(1) of the Customs Act, 1962, applies only to imported goods and does not extend to goods manufactured in a 100% EOU. The Tribunal held that the clearances from 100% EOUs are governed by the Central Excise Act, 1944, and related rules, not by the Customs Act. Consequently, the claim of the assessees that Notification No. 30/97-Cus. should apply to their goods was deemed legally untenable.

2. Extension of Notification No. 28/2001-C.E. to Earlier Notification No. 82/92-C.E.:
The Tribunal analyzed whether the scope of Notification No. 28/2001-C.E., dated 16-5-2001, could be extended to the earlier Notification No. 82/92-C.E., dated 27-8-92. The Tribunal noted that Notification No. 82/92-C.E. provided duty relief only equivalent to the basic customs duty and did not exempt the Additional Duty of Customs (CVD) and Special Additional Duty of Customs (SAD). The Tribunal found no basis in the CBEC Circular or the subsequent notification to suggest that the benefits of Notification No. 28/2001-C.E. should be read into the earlier Notification No. 82/92-C.E. Consequently, the Tribunal held that the exemption under Notification No. 82/92-C.E. could not be extended to CVD and SAD.

3. Recovery of Interest and Imposition of Penalty under the Central Excise Rules:
The Tribunal addressed the proposal to recover interest under Rule 173G and to impose a penalty under Rules 9(2) and 173Q of the erstwhile Central Excise Rules, 1944. It was argued that these rules do not apply to removals from a 100% EOU, which are covered by Chapter V-A. The Tribunal agreed, noting that the clearance documents were duly endorsed by the Bond Officer-in-charge, and there was no intention to evade or avoid payment of duty. Therefore, the imposition of penalties under Rule 9(2) and recovery of interest under Rule 173G were not warranted.

4. Retrospective Application of Clarificatory Notifications:
The Tribunal examined the argument that Notification No. 28/2001-C.E., which provided exemptions for CVD and SAD, should be considered clarificatory and thus retrospective. The Tribunal found that Notification No. 82/92-C.E. was clear and unambiguous in its terms, providing exemptions only for basic customs duty. The subsequent Notification No. 28/2001-C.E. was issued to correct an anomaly and not to clarify an ambiguity. Therefore, the Tribunal held that the benefits of Notification No. 28/2001-C.E. were substantive and prospective, not retrospective. This conclusion was supported by various case laws, including the decision of the Larger Bench in the case of L & T Ltd., which stated that amendments of substantive nature have only prospective effect.

Conclusion:
The Tribunal confirmed the Commissioner's order, holding that the demands for CVD and SAD were correctly confirmed and that the benefits of Notification No. 28/2001-C.E. could not be applied retrospectively to Notification No. 82/92-C.E. The appeal was dismissed, and the Tribunal upheld the decision that the exemption under Notification No. 82/92-C.E. was limited to the basic customs duty and did not extend to CVD and SAD.

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