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2021 (7) TMI 632 - AT - Central Excise100% EOU - demand of excise duty on the raw grade oil - LOP, raw oil (not allowed for export) - demand on the ground that the respondent have wrongly availed benefit of Serial No. 20 of the Notification No. 23/2003-CE since raw oil cannot be considered as a mere waste even though it may be of no use to the Respondent but it is a main raw material used for manufacture of refined oil. Can the said raw oil be treated as if manufacture in a DTA Unit and can be cleared under exemption N/N. 4/2005-CE dated 01.03.2005 and predecessor N/N. 6/2002-CE dated 30.04.2003 as amended by N/N. 37/2003-CE dated 30.04.2003 which is applicable to a DTA Unit? HELD THAT - From the remand order of the tribunal, this tribunal has given clear direction to the Learned adjudicating Commissioner that he shall consider the clearance of raw oil as if cleared by DTA unit and examine whether any duty is liable to be paid. With this clear observation, the Learned Commissioner in de-novo adjudication order bound to decide the duty liability treating the clearance of oil by the respondent as if cleared by the DTA unit. The Learned Counsel for the respondent submits that the remand proceeding was kept in abeyance awaiting the Hon ble Supreme Court judgment in the revenue s appeal COMMR. OF CENTRAL EXCISE-III, AHMEDABAD VERSUS M/S GUJARAT AMBUJA EXPORT LTD. 2015 (11) TMI 156 - SUPREME COURT filed against the Mumbai tribunal order in COMMISSIONER OF C. EX., AHMEDABAD VERSUS GUJARAT AMBUJA EXPORTS LTD. 2006 (9) TMI 391 - CESTAT, MUMBAI . This fact also clearly indicates that revenue was of clear view that the issue in present case and that of revenue appeal in Supreme Court were one and the same but surprisingly even if Supreme Court dismissed the revenue s appeal, revenue has tried to re-open the issue by filing this appeal which was dismissed by the Supreme Court. By following the principles laid down by Hon ble Supreme Court held that the product vegetable raw oil cannot be treated as product of 100% EOU and the same is eligible to clear as if the same is product of DTA and consequently the duty applicable to the DTA unit shall apply to the clearance of raw oil - In the present case the vegetable oil falling under chapter 15.07 during the relevant period is chargeable to nil rate of duty in view of Notification No.4/2005-CE dated 01.03.2005 (serial no 1) predecessor Notification No. 6/2002-CE dated 01.03.2002 as amended by Notification No 37/2003 dated 30.04.2003. Accordingly, the clearance of Raw oil by the respondent is not liable for any duty. Appeals filed by revenue are dismissed.
Issues Involved:
1. Whether raw oil, not allowed for export by a 100% EOU, can be treated as if manufactured in a DTA Unit and cleared under exemption notifications applicable to DTA Units. 2. Whether the clearance of raw oil by the respondent is liable for any excise duty. 3. Applicability of the Supreme Court judgment in the respondent's own case to the present matter. 4. Limitation on the demand for the extended period. Detailed Analysis: 1. Treatment of Raw Oil as Manufactured in a DTA Unit: The respondents, a 100% EOU, were not permitted to export raw oil. The tribunal examined whether raw oil could be treated as manufactured in a DTA Unit and cleared under exemption notifications. The respondents argued that since they were not allowed to export raw oil, it should be treated as if manufactured in a DTA Unit, which is exempt from excise duty under Notification No. 4/2005-CE and its predecessors. The tribunal found that the respondents were recognized as a 100% EOU but were explicitly prohibited from exporting raw oil, which was considered a by-product. The tribunal concluded that raw oil should be treated at par with products of any other DTA Unit, as established in the respondents' previous case upheld by the Supreme Court. 2. Liability for Excise Duty on Clearance of Raw Oil: The tribunal considered whether the clearance of raw oil by the respondents was liable for excise duty. The respondents contended that raw oil was chargeable to nil rate of duty under relevant notifications applicable to DTA Units. The tribunal agreed, citing the Supreme Court's affirmation that raw oil, as a by-product not covered under the 100% EOU scheme, should be subject to the tariff rate applicable to DTA Units, which was nil. The tribunal upheld the Commissioner’s decision that no duty was payable on the clearance of raw oil. 3. Applicability of Supreme Court Judgment: The tribunal noted that the respondents heavily relied on a previous judgment by the Mumbai Tribunal, which was upheld by the Supreme Court. The tribunal examined whether the facts and circumstances of the present case were identical to the earlier case. The tribunal found that the Supreme Court had dismissed the revenue's appeal, affirming that raw oil was not covered under the 100% EOU scheme and was subject to nil duty when cleared by a DTA Unit. The tribunal held that the Commissioner correctly followed the Supreme Court's judgment in the respondents' own case. 4. Limitation on the Demand for the Extended Period: The tribunal observed that the Commissioner had dropped the demand for the extended period beyond one year on the grounds of limitation. The revenue's appeal did not challenge this aspect. Therefore, the tribunal concluded that the dropping of the demand for the extended period had attained finality on the grounds of limitation. Conclusion: The tribunal upheld the Commissioner’s order, finding no merit in the revenue's appeal. The tribunal affirmed that the clearance of raw oil by the respondents was not liable for any excise duty and should be treated as if manufactured by a DTA Unit. The tribunal dismissed the revenue's appeals and upheld the impugned orders.
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