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TMI Blog2013 (4) TMI 433X X X X Extracts X X X X X X X X Extracts X X X X ..... judicating authority. Condition No. 7 of the Notification No. 53/97-Cus., under which the duty free import of the inputs had been made, they would be required to pay customs duty on the inputs used in the manufacture of their finished products in an amount equal to the customs duty payable on the import of their finished products i.e. scrap The impugned order is set aside and the matter is remanded to the original adjudicating authority for de novo decision on this issue - The appeal is allowed by way of remand - The cross objection filed by the Respondent also stands disposed off. X X X X Extracts X X X X X X X X Extracts X X X X ..... show cause notice was confirmed along with interest and besides this penalty of Rs. 1 Lakh was imposed on the Respondent. 1.3 On appeal to the Commissioner (Appeals) against the Addl. Commissioner's order, the Commissioner (Appeals) vide order-in-appeal dated 21-1-2009 set aside the Addl. Commissioner's order and allowed the appeal on the ground that for the purpose of 100% EOUs, the definition of 'manufacture' as given in para 3.31 of the EXIM Policy 1997-2000 has to be adopted and not the definition of manufacture as given in Section 2(f) of the Central Excise Act, 1944 and in this regard, he also referred to the Board 's Circular No. 314/30/97-Excise dated 6-5-1997, wherein it has been clarified that term 'manufacture' for the purpose of export is wider in meaning than that used in Section 2(f) of the Central Excise Act, 1944 and, therefore, the exemption may not be restricted only to the cases where manufacture under Section 2(f) of the Central Excise Act, 1944 is involved. Against this order of the Commissioner (Appeals), the department has filed an appeal and the respondent have filed a cross objection. 3. Heard both sides and perused the records. 4. Shri R. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation of the word 'manufacture' has to be adopted, that relying upon this Circular of the Board and that the Tribunal in the case of Precision Processors (India) (P) Ltd. v. CC, Kolkata reported in 2007 (216) E.L.T. 233 (Tribunal-Kolkata) has held that benefit of concessional rate of duty under DTA clearances under Notification No. 2/95-C.E., cannot be denied just because the process undertaken by EOU - slitting of paper rolls into different sizes does not amount to 'manufacture' under Section 2(f) of Central Excise Act, 1944. He, therefore, pleaded that there is no infirmity in the impugned order. 6. We have carefully considered the submissions made from both the sides and perused the records. The respondent are a 100% EOU engaged in re-cycling of old and used damaged electric transformers, compressors, motors, etc. which are dismantled by them and the different metals obtained are segregated. The final product of the appellant are ferrous as well as non-ferrous metals, which are exported. The respondent are allowed to clear certain quantity of their final product - scrap into DTA by the Development Commissioner in accordance with the provisions of EXIM Policy. The dispute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only excisable goods. However, when the goods manufactured or produced in a 100% EOUs are cleared into DTA, the Central Excise duty on the same is chargeable in terms of the proviso to Section 3(1) of the Central Excise Act, 1944, as the excisable goods produced or manufactured even by a 100% EOUs are the goods produced or manufactured in India. Since the duty on the DTA clearances of 100% EOUs is chargeable in terms of proviso to Section 3(1), the process undertaken by the EOU has to be 'manufacture' within the meaning of this term, as defined in Section 2(f) of the Central Excise Act i.e. marketable and specified in the Central Excise Tariff for levy of excise duty. There is no separate definition of "manufacture" for 100% EOUs, in the Central Excise Act, 1944. If such goods produced/manufactured in a 100% EOU are not excisable, no excise duty under Section 3(1) would be payable. In such a situation. Condition No. 7 of the Notification 53/97-Cus., providing for duty free import of the inputs used for manufacture of finished goods for export, would come in picture and according to this condition, if the goods produced out of imported inputs are not excisable and the same are clear ..... X X X X Extracts X X X X X X X X Extracts X X X X
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