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2019 (2) TMI 1186 - AT - Customs100% EOU - Benefit of concessional rate of duty as per N/N. 23/2003-CE dated 31.3.2003 - Valuation of DTA Clearances - precision automotive components, ancillaries, turbo chargers and parts thereof, casting and tools, dies and moulds, jigs and fixtures - similar goods - It appeared to the Department that value of DTA clearances of bearing housing machined (parts of turbo charger) is more than the prescribed limit of 90% of the FOB value of exports - N/N. 23/2003-CE dated 31.3.2003 vide Sl. No. 3. Held that - Within entitlement of DTA sale, unit may sell in DTA, its products similar to goods which are exported or expected to be exported from units. The description of goods in the Green card does not differentiate or specify goods on the basis of Customs Tariff. It merely treats them belonging to a class. Bearing machines are considered by department as part of Turbo Charger which are parts of automobile, then Precision Automotive Components also being part of Automobiles should fall in the same class, since they are engaged in manufacture and export of various parts of automobiles as stated in the Green Card. The appellant has cleared in DTA Bearing Housing only. Precision Automotive Component was not cleared in DTA. In para 6.8 what is stated is that when more than one product is exported, such unit can clear in DTA upto 90% of value of such specified goods provided the total DTA sale does not exceed 50% FOB value of exports of the unit. The appellant have sold 90% FOB of value of export of Bearing Housing in DTA and has not exceeded 50% of FOB value of the unit since there is no DTA sale of Precision Automotive Component. The condition is therefore fully satisfied. The denial of concessional rate of duty as per the notification is unjustified. Appeal allowed - decided in favor of appellant.
Issues:
1. Interpretation of para 6.8(a) of Foreign Trade Policy 2009 - 2014 regarding DTA sales entitlement. 2. Determination of similarity between different products for DTA clearance. 3. Compliance with conditions stipulated in Notification 23/2003-CE dated 31.3.2003 for concessional duties. Issue 1: Interpretation of para 6.8(a) of Foreign Trade Policy: The case involved a dispute over the interpretation of para 6.8(a) of the Foreign Trade Policy 2009 - 2014 regarding the entitlement of Duty Tariff Area (DTA) sales. The appellant, a 100% Export Oriented Unit (EOU), was accused of exceeding the prescribed limit of DTA sales for a specific product. The department contended that the appellant had contravened the conditions stipulated in the policy, leading to a show cause notice for a differential duty demand. The Commissioner confirmed the demand, leading to the appeal. Issue 2: Determination of similarity between different products: The primary contention revolved around whether Bearing Housing and Precision Automotive components were considered similar goods under para 6.8(a) of the Foreign Trade Policy. The appellant argued that both products fell under the broad category of automotive components and should be treated as similar goods for DTA sales entitlement. The appellant had only cleared Bearing Housing in DTA, not Precision Automotive components. The Tribunal analyzed the Green Card permissions and relevant case laws to conclude that the denial of concessional duty on Bearing Housing was unjustified. The demand was set aside, and the appeal was allowed. Issue 3: Compliance with Notification 23/2003-CE for concessional duties: The case also involved assessing whether the appellant had complied with the conditions stipulated in Notification 23/2003-CE dated 31.3.2003 for concessional duties. The department alleged that the appellant had cleared Bearing Housing into DTA at concessional duty rates exceeding their entitlement. The appellant argued that the conditions were satisfied as they had not exceeded the overall entitlement of DTA sales for the unit. The Tribunal found in favor of the appellant, setting aside the demand and allowing the appeal with consequential relief. In conclusion, the judgment by the Appellate Tribunal CESTAT Chennai addressed the issues of interpreting the Foreign Trade Policy provisions, determining similarity between products for DTA sales entitlement, and assessing compliance with Notification 23/2003-CE for concessional duties. The Tribunal ruled in favor of the appellant, setting aside the demand and allowing the appeal based on the analysis of the policy provisions and relevant case laws.
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