2004 (4) TMI 182 - AT - Central Excise

Summary

Issues:
1. Interpretation of Notification No. 30/97-Cus and Notification No. 82/92 regarding exemption from additional duty of customs.
2. Whether supplies under Advance Release Orders issued under Para 7.4 of Export-Import Policy are eligible for exemption from additional duty of customs.

Analysis:
1. The appellant, a 100% EOU, supplied Hexa Methly Di Silliazine (HMDS) to M/s. Lupin Laboratories Ltd. under Advance Release Orders issued by DGFT. The dispute arose regarding the exemption from additional duty of customs under Notification No. 30/97-Cus. The Revenue contended that supplies were covered by Notification No. 82/92 and additional duty was not exempt, leading to a duty liability of Rs. 10 lakhs. The appellant challenged this finding, arguing that the duty demand was not justified under Notification No. 30/97-Cus. The Tribunal analyzed the provisions of Export-Import Policy and Customs Notifications to determine the applicability of duty exemption.

2. The Tribunal examined Para 7.3 and 7.4 of the Export-Import Policy, distinguishing between Advance Licences issued under these provisions. It noted that imports under advance licences covered by Para 7.4 were exempt not only from basic customs duty but also from additional customs duty. The materials imported under an advance licence issued under Para 7.4 were eligible for exemption from additional duty of customs. The Tribunal emphasized the need to interpret Notifications harmoniously to ensure the duty-free supply of inputs for export production. It held that supplies against Advance Release Orders issued under Para 7.4 should be treated as eligible for exemption from additional duty of customs to maintain consistency between domestic and imported supplies.

3. The Tribunal concluded that the appellant's supplies under Advance Release Orders issued under Para 7.4 were eligible for exemption from additional duty of customs. It highlighted the importance of interpreting Notifications in harmony with the Export-Import Policy to facilitate duty-free supplies for export production. The decision favored the appellant, allowing the appeal and providing consequential relief. The judgment emphasized the need to avoid biases in favor of imports and to support domestic producers in line with the Export-Import Policy's objectives.