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2002 (9) TMI 137 - AT - Central Excise
Issues:
1. Determination of assessable value and duty demands for clearances made by a 100% Export-Oriented Unit in the DTA. 2. Application of proviso to Section 3 of the Central Excise Act, 1944, and circulars issued by CBEC for valuation of goods sold by EOU in DTA. 3. Quantification of duty demand based on notifications reducing excise duty equivalent to customs duty on like imported goods. Analysis: Issue 1: The appellants, a 100% Export-Oriented Unit, were engaged in manufacturing Hydrogen Peroxide and selling in the DTA. The appeal concerned the determination of assessable value and duty demands for clearances made during a specific period. The appellants rectified power issues and started selling export-quality products in the DTA with necessary permissions. Issue 2: (a) The proviso to Section 3 of the Central Excise Act, 1944, states that when an EOU sells in DTA, excise duty should be equivalent to customs duties on like imported goods. Circulars by CBEC emphasized using transaction value for assessment unless specific exceptions apply, which was not the case here. Lower authorities erred in not applying the circular and resorting to Rule 5 of Customs Valuation Rules. (b) The adoption of CIF value of imported goods by lower authorities was contested as not meeting valuation requirements. The duty demand calculation was challenged based on notifications reducing excise duty to 50% of customs duties, as per precedent and prevailing notifications. Issue 3: The appellants contended that they were liable to pay only 50% of Basic Customs Duty under the relevant notifications, contrary to the duty demand calculation in the impugned order. Citing a Larger Bench decision, it was argued that only 50% Basic Duty of Customs should be levied. The Tribunal set aside the order for reworking duties payable and granting consequential relief. In conclusion, the appeal was disposed of with directions to rework duties payable and determine any eligible consequential relief according to the law.
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