2000 (10) TMI 406 - AT - Central Excise

Summary

Issues:
- Whether duties of Customs are chargeable on clearances of cotton waste by 100% export oriented undertaking to the Domestic Tariff Area (DTA).

Analysis:
The appeal involved the question of whether duties of Customs are applicable on clearances of cotton waste by a 100% export oriented undertaking to the Domestic Tariff Area. The Appellant, a registered 100% E.O.U. engaged in manufacturing Cotton Yarn, cleared cotton waste to the DTA without payment of duty under Notification No. 8/96-C.E. A show cause notice was issued demanding duty, which was initially dropped but later confirmed by the Commissioner (Appeal). The Appellant argued that as per the Notification, no duty was payable on goods produced by a 100% EOU. The Tribunal considered the nature of duty levied on goods by 100% EOU as Central Excise Duty, with the measure of collection being Customs duty. It was noted that Section 3 of the Central Excise Act does not require 100% EOU to pay separate customs duties in addition to Central Excise duty. The Tribunal emphasized that as per Notification No. 8/96, no Customs duty under Section 12 of the Customs Act would be leviable on goods produced by 100% EOU and allowed to be sold in India. The Tribunal distinguished a previous case and held that no duty was payable by the Appellant on the cotton waste cleared to the DTA, thereby allowing the appeal.

In conclusion, the Tribunal ruled in favor of the Appellant, holding that duties of Customs are not chargeable on clearances of cotton waste by a 100% export oriented undertaking to the Domestic Tariff Area. The decision was based on the interpretation of relevant notifications and legal provisions, emphasizing that the nature of duty on goods produced by 100% EOU is Central Excise Duty, and no separate Customs duty is required to be paid. The Tribunal's analysis focused on the specific provisions and notifications applicable to the case, ultimately leading to the allowance of the appeal filed by the Appellant.