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2016 (9) TMI 1055 - AT - Central Excise100% EOU - Excisability - cut flowers - demand - cut flowers cleared to DTA without informing to the department, without taking permission from the Development Commissioner and without discharging duty liabilities - Held that - it is found that the issue and methodology of charging duty on articles allowed to be cleared inter alia from a EOU, into DTA is now been said to rest with effect from 18.05.2001 by way of amendment in Notification No. 126/94-Cus. However it is seen that the period of dispute in the present appeal is from 1997-98 to 2001-02 during which period the unit made DTA clearances of cut flowers and on which the order in original had inter alia confirmed demand, which on appeal was set aside by the Commissioner (Appeals). Therefore, prior to the amendment with effect from 18.05.2001 to Notification No. 126/94 dated 03.06.1994 there cannot be any duty charged for the said DTA clearances of cut flowers for the reason that flowers are not excisable under the Central Excise Tariff supported by various case laws. For the period of dispute, after 18.05.2001, in the present case on such clearances of cut flowers customs duty will be liable to be paid, equal in amount to that leviable on the inputs, if any, that have gone into the production or packaging of such flowers. The matter is therefore remanded to the original adjudicating authority to re-work the duty liability in case any inputs obtained by assessee as per the notification. - Appeal allowed by way of remand
Issues: Dutiability on non-excisable goods, Requirement of permission for DTA clearances, Relevant provisions for duty levy.
Dutiability on non-excisable goods: The case involved the issue of whether cut flowers cleared by the Assessee in the Domestic Tariff Area (DTA) were excisable goods, thereby attracting duty liability. The Commissioner (Appeals) determined that since cut flowers were not mentioned in the Central Excise Tariff Act, they were non-excisable goods as per Section 2 of the Central Excise Act, 1944. Consequently, the provisions of Section 3 of the Central Excise Act were deemed inapplicable. The Commissioner (Appeals) referenced the case law M/s Vikran Green Tech(l) Ltd V/s COE, Pune-l and ruled in favor of the Assessee, setting aside the demand, interest, and penalty. Requirement of permission for DTA clearances: The Department appealed the Commissioner (Appeals) decision, arguing that Notification No. 56/2001 clarified that goods cleared from Export Oriented Units (EOU) to DTA required payment of excise or customs duty. The Department contended that the Assessee should have obtained permission from the Development Commissioner for such clearances. The Appellate Tribunal noted the amendment in Notification No. 126/94 dated 18.05.2001, which specified duty payment for such clearances post-amendment. However, the Tribunal observed that during the disputed period (1997-98 to 2001-02), cut flowers were not excisable under the Central Excise Tariff, leading to the conclusion that no duty could be charged for DTA clearances of cut flowers before the amendment. Relevant provisions for duty levy: The Tribunal emphasized that post-amendment on 18.05.2001, customs duty was leviable on inputs used for production, manufacture, or packaging of goods cleared from EOU to DTA. The Tribunal directed the matter to be remanded to the adjudicating authority to determine duty liability based on inputs obtained by the Assessee as per the notification. The Tribunal clarified that no duty liability would arise before 18.05.2001, and instructed the adjudicating authority to dispose of the matter accordingly. Ultimately, the appeal was allowed by way of remand, with the decision pronounced on 22.08.2016.
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