2014 (3) TMI 741 - AT - Central Excise

100% EOU - Quantum of clearance of the goods in DTA - Held that - appellant before Commissioner (Appeals), had restricted their arguments only in respect of penalty and interest and have nowhere raised any ground challenging the confirmation of demand against them, but in view of the clear facts available in the present case and the legal issue having been decided till Apex Court, we deem it fit, in the interest of justice, to allow the appeal last to raise the ground challenging confirmation of duty - Following decision of AMITEX SILK MILLS PVT. LTD. Versus COMMISSIONER OF CENTRAL EXCISE, SURAT-I 2005 (10) TMI 128 - CESTAT, NEW DELHI - Decided in favour of assessee.

Summary

Issues:
1. Clearance of rejects of textured/twisted yarn and waste of yarn in Domestic Tariff Area (DTA) in excess of restrictions imposed under EXIM Policy 1997-2002.
2. Calculation of duty based on 50% of the FOB value of exports without considering deemed export value.
3. Imposition of penalty and interest due to change in EXIM Policy.
4. Challenge to duty liability and penalty before Commissioner (Appeals).
5. Interpretation of DTA sales computation in light of Tribunal and Supreme Court decisions.
6. Applicability of physical export versus deemed export in computing DTA sales.

Analysis:
1. The appellant, a 100% EOU, cleared rejects of yarn in DTA, leading to proceedings for Excise duty payment exceeding Customs duty value. The Revenue argued the excess clearance violated EXIM Policy restrictions.
2. Duty calculation based on 50% of FOB value without including deemed export value resulted in duty confirmation, penalty imposition, and interest at 24% per annum.
3. Commissioner (Appeals) upheld the duty liability and penalty, rejecting the appellant's plea of no wilful suppression but due to EXIM Policy change, leading to the present appeal.
4. The appellant cited Tribunal's decision in Amitex Silk Mills Pvt. Ltd. case, supported by Supreme Court dismissal of Revenue's appeal, to argue in their favor.
5. The Revenue contended the duty was unchallenged before Commissioner (Appeals), citing a Madras High Court judgment distinguishing physical export from deemed export in DTA sales computation.
6. Despite the appellant not challenging the duty confirmation earlier, the Tribunal, considering legal precedents including Apex Court decisions, allowed the appeal to challenge the duty confirmation, ultimately setting aside the impugned order in favor of the appellant.