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2023 (9) TMI 865 - AT - Central Excise100% EOU - Goods supplied to Bharat Oman Refineries Ltd. Mumbai for setting up crude petroleum refinery for the purpose of calculating Excise Duty which is equivalent to 50% of all Customs Duty in terms of Notification No. 23/2003-CE dated 31.03.2003 - applicability of N/N. 21/2002-CUS Sr. No. 228 - HELD THAT - It is a settled law that for the purpose of calculation of Excise duty in respect of goods manufactured by 100% EOU, all the Customs duty leviable on the similar goods if imported shall apply. As per Notification No. 23/2003-CE the 100% EOU is required to pay 50% of all the customs duty. While taking the customs duty exemption notification of customs if any applicable on the like goods also need to be considered. In the present case, the appellant s case is that they have supplied the goods for setting up crude petroleum refinery of M/s Bharat Oman Refineries Ltd., Mumbai. On going through the Notification No. 21/2002-CUS Sr. No. 228 the exemption entry does not bear any condition except the condition that the goods is specified under the list 17 of Notification are eligible for exemption if the same is meant for crude petroleum refinery. If this fact is satisfied than the appellant is eligible for concessional rate of 2.5% of basic customs duty (10-5 as per Notification 21/2002-CUS 50% as per Notification No. 23/2003-CE 2.5%). The Adjudicating Authority has denied the exemption Notification No. 21/2002-CUS on the ground that the raw material imported by the appellant was under Nil Rate of duty in terms of notification No. 52/2003-CUS(EOU). Thus, the Adjudicating Authority has gone on all together irrelevant fact. Here the duty ability has to be decided in respect of the goods manufactured by the appellant, which is nothing to do with the duty ability of imported raw material of the appellant. Therefore, the entire finding of the Adjudicating Authority is on wrong interpretation of the Notification in the present case. The finished goods manufactured by the appellant, EOU is not attracting nil rate of duty. Therefore, the Adjudicating Authority s finding is absurd and not relevant in the present case. The matters needs to be reconsidered by the Adjudicating Authority by consideration the exemption Notification No. 21/2002-CUS in its correct spirit only after satisfaction that the goods in question i.e. Steel Pipes were supplied for the purpose of setting up of crude petroleum refinery by their buyer M/s. Bharat Oman Refineries Ltd. Mumbai - Appeal allowed by way of remand.
Issues involved:
The issue involved in the present case is whether finished goods manufactured by the appellant, a 100% EOU, are eligible for exemption under Customs Notification No. 21/2002-CUS Sr. No. 228 when supplied to Bharat Oman Refineries Ltd. Mumbai for setting up a crude petroleum refinery for calculating Excise Duty equivalent to 50% of all Customs Duty in terms of Notification No. 23/2003-CE dated 31.03.2003. Comprehensive details of the judgment: Issue 1: Eligibility for exemption under Customs Notification No. 21/2002-CUS The appellant contended that they are eligible for the concessional rate of duty for calculating Excise Duty as the goods supplied were for setting up a crude petroleum refinery, meeting the criteria of the exemption notification. The appellant relied on various judgments to support their claim. The Revenue, represented by the Learned Superintendent, reiterated the findings of the impugned order denying the exemption. Court's Analysis and Decision: The Tribunal considered that for the calculation of Excise duty on goods manufactured by a 100% EOU, all Customs duty leviable on similar imported goods applies. The appellant claimed that the goods were supplied for the refinery of Bharat Oman Refineries Ltd., meeting the criteria of the exemption notification. The Tribunal observed that the denial of exemption by the Adjudicating Authority based on the duty rate of imported raw materials was irrelevant. The Tribunal set aside the impugned order and remanded the case to the Adjudicating Authority for reconsideration based on the correct interpretation of the exemption notification. Conclusion: The Tribunal held that the appellant is eligible for the concessional rate of duty for calculating Excise Duty under the specified Customs Notifications, and the matter is to be reconsidered by the Adjudicating Authority in light of the correct interpretation of the exemption criteria. *( Pronounced in the open court on 18.09.2023 )*
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