2013 (1) TMI 121 - AT - Central Excise

Clearance of goods to DTA by 100% EOU without permission Assessee manufacture Panel meters, multimeters, transducers, insulation testers etc. - Notification No.2/1995-CE dated 4.1.1995 Revenue argued that permission to sell the goods in DTA only in respect of panel meters Whereas assessee have cleared the goods other than panel meters during the period June 2001 to April 2002 Held that - Following the decision in case of RISHABH INSTRUMENTS PVT LTD.(2013 (1) TMI 98 - BOMBAY HIGH COURT) the Development Commissioner s Office clarified that as per the policy all manufactured goods which are exported can be cleared to the DTA to the extent permitted under the policy. In the light of the clarification given by the Development Commissioner, the concessional rate of duty is available in respect of multimeters, insulation testers, transducers, energy meters and electrical/electronics measuring instruments, spares and accessories. In favour of assessee

Summary

Issues:
1. Interpretation of Notification No.2/1995-CE for a 100% EOU regarding clearance of goods to DTA.
2. Applicability of concessional rate of duty on goods cleared to DTA other than those specified in permission.

Issue 1: Interpretation of Notification No.2/1995-CE
The appellant, a 100% EOU, appealed against an order confirming demand for clearing goods other than panel meters to DTA without proper permission. The Tribunal previously ruled in the appellant's favor, entitling them to the benefit of Notification No.2/1995-CE, calculating duty based on 50% of aggregate customs duties. The Revenue challenged this decision in the Hon'ble Bombay High Court, raising questions on duty computation and similarity of goods sold in DTA. The High Court, citing precedent, dismissed Revenue's contentions, upholding the Tribunal's decision in favor of the appellant.

Issue 2: Applicability of Concessional Rate of Duty
The dispute centered on whether goods other than panel meters, like multimeters and transducers, cleared to DTA by the EOU were eligible for the concessional rate of duty under Notification No.2/1995-CE. The Revenue argued that specific permission was granted only for panel meters, thus excluding other goods from the benefit. However, the Development Commissioner clarified that all manufactured goods exported could be cleared to DTA as per policy. Relying on this clarification, the CESTAT allowed the appellant's claim, holding that the concessional rate of duty applied to goods like multimeters and transducers. The Tribunal's decision, based on the Development Commissioner's clarification, was upheld by the High Court, leading to the dismissal of the appeal against the appellant.

In conclusion, the Tribunal's decision, supported by the High Court, favored the appellant's entitlement to the benefit of Notification No.2/1995-CE for goods cleared to DTA, including those beyond panel meters. The clarification provided by the Development Commissioner played a crucial role in establishing the appellant's eligibility for the concessional rate of duty on various goods, ultimately resulting in the appeal being allowed and the impugned order set aside.