2016 (6) TMI 991 - AT - Central Excise

100% EOU - clearance goods into Domestic Tariff Area (DTA) in excess of 50% of FOB value of exports - eligibility of concessional rate of duty for the said clearances - Held that - DTA clearances permitted by the Development Commissioner by itself will not decide the rate of duty applicable which the tax authorities have to determine in terms of the applicable notification. Year-wise break-up of FOB value and DTA clearances has not been specifically recorded and a clear finding about the eligibility of the appellant arrived at. This is necessary as the appellant is claiming that whenever Development Commissioner gives permission for DTA clearance all such clearances will be entitled for concessional rate of duty when they clear the goods within the period stipulated. - Matter remanded back.

Summary

Issues involved:
Eligibility for concessional rate of duty for DTA clearances made during 2011-12 in terms of FTP and notification.

Analysis:
The appeal challenged an order by the Commissioner of Central Excise regarding the eligibility of a company engaged in manufacturing diesel generator sets, registered as EOU, for a concessional rate of duty for clearances into the Domestic Tariff Area (DTA) in 2011-12. The dispute arose from the company's claim under Notification No.23/2003-CE, dated 31.03.2003, which required that the total value of goods cleared into DTA should not exceed 50% of the FOB value of exports made during the previous financial year. The original authority confirmed demands, which were partially upheld on appeal, resulting in the company challenging the decision. The appellant argued that clearances to DTA were made with proper permissions from the Development Commissioner and should be entitled to the concessional duty. The main contention was whether the condition in the notification was a restriction on entitlement or availment of the concession.

The Authorized Representative contended that the concessional rate of duty would apply only if the total value of goods cleared into DTA did not exceed 50% of the FOB value of exports from the previous year, regardless of permissions granted by the Development Commissioner. The Tribunal heard both sides and examined the records to determine the company's eligibility for the concessional rate of duty for DTA clearances in 2011-12. It was noted that the rate of duty should align with the notification claimed by the appellant, and DTA clearances required permission from the Development Commissioner, but the duty rate was to be determined by the tax authorities based on the notification. The Tribunal found that a comprehensive examination of the FOB value of exports and DTA clearances was necessary to make a correct determination of the duty amount to be paid by the appellant.

Consequently, the Tribunal set aside the impugned order and remanded the matter to the original authority for a detailed finding after examining the figures of FOB value of clearances for export, DTA clearances, permissions granted by the Development Commissioner, and the terms of the Central Excise notification. The company was to be given an opportunity to present their case before a reasoned order was passed. The decision highlighted the importance of aligning permissions with notification terms for concessional duty eligibility and emphasized the need for a thorough examination of relevant figures for a conclusive determination.