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TMI Blog2013 (9) TMI 613X X X X Extracts X X X X X X X X Extracts X X X X ..... ad been made out of the inputs of the Indian origin - the benefit of Notification No. 8/97-C.E. can be allowed to a 100% EOU in respect of DTA clearances even if the unit was using indigenously procured as well as imported raw materials, provided the unit was able to satisfy the Jurisdictional Central Excise Authorities beyond doubt that inputs used in the manufacture of goods which were to be sold in DTA had been manufactured out of indigenous raw material only by the way of maintenance of records, physical scrutiny/verification of manufacturing process etc. The appellant were not eligible for Notification No. 8/97-C.E. - the duty demand and penalty was set aside and the matter was remanded to the original Adjudicating Authority for re- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otification No. 8/97-C.E. under which the duty chargeable on the goods cleared into DTA as per the provisions of the EXIM Policy is the duty chargeable in respect of like goods manufactured and cleared by the DTA units, subject to condition that the goods cleared into DTA have been manufactured wholly out of indigenous inputs. The department was of the view that the appellant were not eligible for the exemption under this notification, as just before the period of dispute, they had used imported zinc for the purpose of galvanising and while switching over to the use of indigenous zinc, there was already some quantity of imported zinc in the Kettle and as such the goods cleared into DTA cannot be said to be made wholly out of the indigenous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . E/476/2005, the Department has filed Appeal No. E/134/2005. In the department s appeal, the department has challenged the Commissioner (Appeals) s order reducing the penalty on the appellant-company and also the order holding that part of the duty demand is time-barred. 2. Heard both the sides. 3. Shri Mayank Garg, Advocate, the learned Counsel for the appellant-company, pleaded that the department does not dispute that during the period from 3rd July 1997 till November 1997 only indigenous zinc procured free of excise duty had been used, that the imported zinc had been used only during the period prior to 3-7-1997, that just because while starting the use of indigenous zinc from 1st week of July 1997, there may be some left over impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal, Shri Garg while conceding that the show cause notice dated 4-2-1998 issued for recovery of allegedly short paid duty for the period from July 1997 to November 1997 is within time, pleaded that in the circumstances of the case, no penalty is imposable and hence there is no merit in the Revenue s plea for enhancement of the penalty. 4. Shri A.K. Jain, the learned Jt. CDR while defending the Commissioner (Appeals) s order denying the exemption Notification No. 8/97-C.E. to the appellant-company, pleaded that the benefit has been correctly denied as the authorised signatory of the appellant-company in his statement dated 2-2-1998 has clearly and categorically admitted that it was not possible to segregate the imported and indigenous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed the records. 6. The point of dispute in this case is as to whether the appellant during period from July 1997 to November 1997 were eligible for Notification No. 8/97-C.E. in respect of their DTA clearances. The benefit of Notification No. 8/97-C.E. would be available in respect of DTA clearances made in accordance with the provisions of EXIM Policy, only if the goods have been made out of the inputs of the Indian origin. According to the Board Circular No. 442/8/99-CX., dated 4-3-1999, the benefit of Notification No. 8/97-C.E. can be allowed to a 100% EOU in respect of DTA clearances even if the unit is using indigenously procured as well as imported raw materials, provided the unit is able to satisfy the Jurisdictional Central Excis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us zinc. In view of this position, we are of the view that the benefit of Notification No. 8/97-C.E. has been correctly denied. However, we find that the department has not considered the appellant s eligibility for Notification No. 2/95-C.E. under which the effective rate of duty is 50% of the aggregate of duties of customs and after denying the benefit of Notification No. 8/97-C.E., has simply charged duty at the full rate mentioned under proviso to Section 3(1) of the Central Excise Act, i.e. the aggregate duties of customs chargeable on the import of like goods into India. In view of this, the matter has to be remanded to the original Adjudicating Authority for considering the eligibility of the appellant-company for the benefit of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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