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TMI Blog2003 (6) TMI 271X X X X Extracts X X X X X X X X Extracts X X X X ..... he goods on production of valid licence and after payment of appropriate duty. The appellants made submission as regards the duty applicable and requested to endorse the subject DFRC as per their interpretation and allow the assessee to make the clearance of the detained goods ordered to be released. The Dy. Commissioner, therefore informed the assessee that - Notification No. 125/84-C.E., dated 26-5-1984 was not applicable for the goods allowed to be removed in India. He observed that the contention of the assessee that the sales under Para 9.10 of the EXIM Policy, 1997-2002 was a supply to others and not allowed to be removed in India category was not acceptable and held that as all such sales/supplies were under the DTA sale category of the EXIM policy, the clearances under DFRC was also a permission allowed to be sold or cleared in India and therefore, the benefit of Notification No. 125/84-C.E. could not be applied to such sales. Thereafter, the Range Supdt. vide his aforementioned letter No. C.Ex./R-X/Shrishti/EOU/2000, dated 11-3-2002 informed the assessee that as per his letter dated 20-2-2002, the assessee were directed to clear the detained goods under DFRC licen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellants contending that the sales under Para 9.10 of the EXIM Policy, 1997-2002 cannot be treated as supply to others; that all such sales/supplied were under the DTA sale category of EXIM Policy and the clearance under DFRC was also a permission to be sold or cleared in India, and hence, the benefit of Notification No. 125/84 cannot be applied to such sales, is contrary to the interpretation of the term such goods if allowed to be sold in India as accepted by the Hon ble Supreme Court at Para 18 in the case of M/s. SIV Industries, 2000 (117) E.L.T. 281 (S.C.). Thus, the contention of the D.C.C.Ex., Kalyan-II Division in his letter F. No. V/C.Ex./K-II/EOU/2002, dated 7-3-2002 and subsequent communication of the Range Suptd. Vide his letter No. C.Ex./R-X/Shrishti/EOU/2000, dated 11-3-2002 reiterating the aforementioned instructions and returning the DFRC licences without endorsement in the absence of alleged payment of appropriate Central Excise duty, are legally not correct and proper and are required to be set aside being contrary to the settled law. (b) The grounds taken by the Revenue in the present stay application are as follows :- (i) The goods manufactured in 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xported. However same exceptions are given thereunder. Accordingly unit may sell goods up to 50% FOB value of export on payment of applicable duties, in DTA. However, the clearance of goods manufactured in 100% EOU to a DFRC holders has to be consider as import only and therefore, CVD is payable in terms of Notfn. No. 28, dated 16-5-2001. (vi) Para 9.10 of the policy consists of series of deeming provisions. One of such provision is that the supplies to domestic tariff areas made against payment in foreign exchange shall be counted towards fulfilment of export performance. The object behind the provision of Para 9.10 appears to be earning foreign exchange. Therefore, the goods manufactured in 100% EOU appears to have been exempted from payment of Central Excise duty under Notification No. 125/84, dated 26-5-1984. However, the goods cleared by the assessee are neither earning foreign exchange nor revenue for exchequer. This may not be the intention of the Government. Therefore, the decision of Commissioner (Appeals) passing the benefit of exemption Notfn. No. 125/84, dated 26-5-1984 to those goods does not appear to be correct and is contrary to the provisions of law. 2. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been interpreted by the Hon ble Apex Court, relating to its use in the EXIM Policy and in the law relating to an EOU as follows :- 18......It also becomes apparent that in view of the EOU scheme as modified from time to time and corresponding amendments to Section 3 of the Act the expression allowed to be sold in India in proviso to Section 3(1) of the Act is applicable only to sales made up to 25% of production by 100% EOU in DTA and with permission of the Development Commissioner. No permission is required to sell goods manufactured by 100% EOU lying with it at the time approval is granted to debond. In this view of the matter, we cannot uphold the ground No. (ii) at this prima facie stage. Since, the removals against DFRC are not covered by the relevant para of the EXIM Policy applicable to DTA sales permissible and allowed to be sold as interpreted by the Hon ble Supreme Court. Since, DFRC removals are not within the 25% quota. When the provision of the policy Paras 9.9, 9.10 and Chapter 10 and Appendix 42 of the EXIM Policy are read and the fact that as per Appendix 42, DFRC removals under Chapter 10 i.e. Para 10 onwards would count towards determining th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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