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2017 (10) TMI 70 - AT - Central Excise100% EOU - Goods cleared to DTA from EOU - exemption under N/N. 6/2006-CE dated 01.03.2006 - duty calculation as per Section 3 proviso of Central Excise Act, 1944 - Held that - The duty payable for such clearance is in terms of the proviso to section 3 of the Central Excise Act, 1944. The said section stipulates that the duty shall be equal to aggregate of duties of customs which would be leviable under Customs Act, 1962 or any other law for the time being enforced, on the like goods produced or manufactured outside India, if imported into India. Admittedly the aggregate of duties of customs will include additional duty of customs which is computed based on the rate applicable to goods produced or manufactured in India - In the present case, the N/N. 6/2006-CE is applicable to goods manufactured in India. The objection of the Revenue is that the said Notification issued under section 5A of the Act did not specifically indicate that the same is available to goods produced or manufactured in 100% EOU. In the absence of such stipulation the rate of duty applicable should be determined without extending the benefit of N/N. 6/2006-CE. While calculating the duty to be paid in terms of proviso to section 3, the appellant-assessee can avail the exemption N/N. 6/2006-CE. - appeal allowed - decided in favor of appellant.
Issues: Eligibility of exemption under Notification No.6/2006-CE for goods cleared from EOU to DTA in terms of duty calculation under Section 3 proviso of Central Excise Act, 1944.
In this case, the Appellate Tribunal CESTAT Kolkata heard an appeal by the Revenue against the order of the Commissioner of Central Excise(Appeal-I), Kolkata, regarding the eligibility of the appellant-assessee to avail exemption under Notification No.6/2006-CE while clearing goods from EOU unit to DTA in accordance with duty calculation under Section 3 proviso of the Central Excise Act, 1944. The appellant-assessee had earlier faced duty denial under the said Notification for a previous period. The appellant sought waiver of pre-deposit, citing settled issues in their favor by the Tribunal and the Gujarat High Court in similar cases. The Tribunal decided to take up both appeals together as the issue was identical for the same appellant-assessee, waiving the pre-deposit requirement for the appellant's appeal as well. The central point of dispute was the availability of exemption under Notification No.6/2006-CE to the appellant-assessee, a 100% EOU unit clearing goods to the domestic tariff area. The duty payable for such clearance was determined by the proviso to Section 3 of the Central Excise Act, 1944, which mandates that duty should be equivalent to the aggregate of customs duties applicable to goods produced outside India if imported into India. The Revenue argued that the Notification did not explicitly state its applicability to goods produced in a 100% EOU, thus claiming duty calculation without extending the benefit of the Notification. However, the Tribunal noted that the Notification unconditionally exempted goods manufactured in India, and since the duty calculation for goods cleared to DTA was considered akin to importing goods into India, the Notification was rightly applicable. The Tribunal also referenced a clarification from the Director General of Export Promotion (CBEC) and previous Tribunal decisions supporting the appellant's position. Consequently, the Tribunal held that the appellant-assessee could avail the exemption under Notification 6/2006-CE while calculating the duty under the proviso to Section 3. The appeal by the Revenue was dismissed, and the appeal by the appellant-assessee was allowed, with the stay application also being disposed of accordingly.
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