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TMI Blog2014 (7) TMI 1015X X X X Extracts X X X X X X X X Extracts X X X X ..... ing exported, in this case prima facie the product clear into DTA - O-Ring and the products exported - Striker bumpers and nut seals are not similar. The fact that the advance DTA clearances in terms of para 6.8(k) of the Foreign Trade Policy are not covered by this exemption notification is also clear from the Condition (II)(b) of the notification, according to which the total value of the goods cleared into DTA under sub-para (a), (d), (e) and (g) of para 6.8 does not exceed 50% of the FOB value of exports made during the financial year. Prima facie appellant were not entitled for concessional rate of duty under Notification No. 23/2003-C.E. in respect of advance DTA clearances made by them during the period from October 2006 to October 2007 - product being cleared into DTA and products being exported were not similar was never disclosed by the appellant to the department. Beside this, the appellant could not be unaware of the fact that while concessional rate of duty under Notification No. 23/2003-C.E. which they had erroneously availed, is available only when the DTA clearance are made under sub-para (a), (d), (e), (g) of the para 6.8 of the Foreign Trade Policy and the adva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reign Trade Policy, 2004-09 while in this case, the goods had been cleared to DTA in accordance with the provisions of sub-para (k) of para 6.8 of the Foreign Trade Policy. Sub-para (k) of para 6.8 pertains to advance DTA clearances while para (a), (d), (e) or (g) of para 6.8 pertain to the regular DTA clearances. Thus the advance DTA clearances covered by para 6.8(k) of the Foreign Trade Policy are not covered by the Notification. (ii) For the benefit of concessional rate under Notification No. 23/2003-C.E. the goods cleared into DTA (other than waste, scrap or remnants) are similar to the goods exported. In this case while the DTA clearances have been made of the O-rings, the goods exported during the period of dispute were mainly striker bumpers and nut seals which were totally different item; (iii) the appellant had failed to achieve net positive foreign exchange earning during 2006-2007 and 2007-2008, which is also a requirement under para 6.8(a) of the Foreign Trade Policy for being eligible for DTA clearances and thus the DTA clearances cannot be said to have been made in accordance with the provisions of para 6.8(a) of the Foreign Trade Policy. 1.2 On the above bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale permission granted by the Development Commissioner, that even the advance DTA clearances made against the permission given in terms of para (g) of Appendix 14-1H of the Handbook of Procedures 2004-2009 are eligible for the concessional rate of duty under Notification No. 23/2003-C.E., that positive NFE had been achieved by the time of debonding in 2009 and it is not necessary that during the period of making DTA sales against advances DTA permission, the NFE should be positive, that the condition of the exemption Notification regarding the DTA clearances having been made in terms of sub-para (a), (d), (e) or (g) of para 6.8 of the Foreign Trade Policy is not attracted in case of advance DTA sales made in terms of sub-para (k) of para 6.8 and as such denial of exemption on the ground that the DTA clearances were made in terms of para 6.8(k) of the Foreign Trade Policy is not correct, that the condition in the Notification that the goods cleared into DTA must be similar to the goods exported is not applicable when the DTA clearances are made against advance DTA clearances permission under para 6.8(k) of the Foreign Trade Policy, that in any case the duty demand is time barred, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f para 6.8 of the Foreign Trade Policy; (II) The exemption is available only if the Deputy Commissioner of Customs or Assistant Commissioner of Customs or Deputy Commissioner of Central Excise, as the case may be, is satisfied that - (a) the goods being cleared in the domestic tariff area, other than scrap waste, or remnants, are similar to the goods which are exported or expected to be exported from the units during the specified period of such clearances in terms of Foreign Trade Policy; (b) the total value of such goods being cleared under sub-paragraph (a), (d), (e) or (g) of para 6.8 of the Foreign Trade Policy into domestic tariff area from the units does not exceed 50% of the FOB value of exports made during the year [starting from 1st April of the year and ending with 31st March of the next year] by the said unit; and (c) the balance of production of the goods which are similar to such goods under clearance into domestic tariff area, is exported out of India or disposed in domestic tariff area in terms of para 6.9 of the Foreign Trade Policy. (III) clearances of goods into domestic tariff area under paragraph (a), (d), (e) or (g) of para 6.8 of the Foreign Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rugs). (b) For services, including software units, sale in the DTA in any mode, including on line data communication shall also be permissible up to 50% of FOB value of exports and/or 50% of foreign exchange earned, where payment of such services is received in foreign exchange. (c) Gems and jewellery units may sell up to 10% of FOB value of exports of the preceding year in DTA subject to fulfilment of positive NFE. In respect of sale of plain jewellery, the recipient shall pay concessional rate of duty as applicable to sale from nominated agencies. In respect of studded jewellery, duty shall be payable as applicable. (d) Unless specifically prohibited in the LOP, rejects within an overall limit of 50% may be sold in the Domestic Tariff Area (DTA) on payment of duties as applicable to sale under paragraph 6.8(a) on prior intimation to the Customs authorities. Such sales shall be counted against DTA sale entitlement. Sale of rejects up to 5% of FOB value of exports shall not be subject to achievement of NFE. (e) Scrap/waste/remnants arising out of production process or in connection therewith may be sold in the DTA as per the Standard Input-Output norms modified under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate of duty only to the goods cleared into domestic tariff area in accordance with sub-para (a), (d), (e) or (g) of para 6.8 of the Foreign Trade Policy and since it does not cover the goods cleared into DTA against advance DTA sale permission given under sub-para (k) of para 6.8 of the Foreign Trade Policy, it is very clear that the goods sold Into DTA against advance DTA sales permission granted under para 6.8(k) are not covered by this notification. We also find that while in terms of the conditions of this notification, the product being sold into DTA must be similar to the product being exported, in this case prima facie the product clear into DTA - O-Ring and the products exported - Striker bumpers and nut seals are not similar. The fact that the advance DTA clearances in terms of para 6.8(k) of the Foreign Trade Policy are not covered by this exemption notification is also clear from the Condition (II)(b) of the notification, according to which the total value of the goods cleared into DTA under sub-para (a), (d), (e) and (g) of para 6.8 does not exceed 50% of the FOB value of exports made during the financial year. In the case of advance DTA clearances, this condition cann ..... X X X X Extracts X X X X X X X X Extracts X X X X
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