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TMI Blog2005 (10) TMI 539X X X X Extracts X X X X X X X X Extracts X X X X ..... r Customs Duty exemption and for the past 7 years they have not imported any raw material. They have achieved value additions in terms of net foreign exchange of nearly 100%. As a BIFR company, they were closed for a long period, re-commencing operation only in August 1999. 1.2 The Development Commissioner, SEEPZ-SEZ, Ministry of Commerce, Government of India, Andheri, Mumbai, is the sponsoring authority for the Appellants' EOU. They after completing each quarter based on their export performance, duly certified, made application to the said Development Commissioner for grant of DTA sale permission. After receipt of such permissions, they started selling goods to various customers, including Tata Iron & Steel Company Ltd., hereinafter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntract with TISCO was amended from 1-1-2001 to 31-12-2001, revised assessable values due to reduction in conversion fees paid by TISCO was intimated to the Department on 19-7-2001, indicating clearly that the contract was a conversion contract. On their request, the copy of the agreement with TISCO was sent vide a letter dated 3-9-2001 acknowledged by the Department and Central Excise Audit team visited the assessee's works in mid September 2001 and on finding that the dispatches lo TISCO were not permitted under DTA sale as the same amounted to job work/sub-contracting. The CIU Officers thereafter came to the works and ordered the detention of 1,084 MT of Silicon Manganese, on the ground that the same was not permitted to be dispatched aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03 V(72)3-26/02/364 01/2002 to 02/2002 986.000 2,02,94,838/- 70,62,604/- 6. 25-2-2003 V(72)3-53/02/D/ 578 03/2002 1190.000 2,43,65,445/- 84,79,172/- 7. 13-3-2003 V(72)3-54/02/D/ 740 04/2002 to 06/2002 695.000 1,43,06,320/- 49,78,595/- Total 15792.850 32,31,30,000/- 11,56,08,497/- The Notices were demanding duty on the same basis and had made the same proposals. The Commissioner, Central Excise, Nagpur, vide an order dated 24-6-2003 disposed off the said 7 show cause notices, confirming the demands under Section 11A of the Act with interest imposed a penalty of ₹ 50 lakhs and a redemption fine of ₹ 50 lakhs. Hence this appeal No. E/2691/03. Appeal Nos. E/2692/03 & Appeal No. E/1976/04 are filed by the EOU, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g considered by the Apex Court in the case of Prestige Engineering (I) Ltd. Subsequent to this decision, the Constitution Bench of the Apex Court, in the case of Ujagar Prints, 1988 (38) E.L.T. 535 (S.C.), have held '30. In the case of processing-houses, they become liable to pay excise duty not because they are the owners of the goods but because they cause the 'manufacture' of the goods' This would indicate that the Commissioner's reasoning arrived at in para 16(1) of the order impugned on examining the agreement to the effect that at all times property of all materials was vested with TISCO cannot be an acceptable reason to call for the present activity indulged by the EOU to be not a manufacture by the EOU. Following the Apex Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alues for assessment of duty in this case. If there was no sale, the invoice values could not be the assessable value as accepted by the Department in the SCNs. Since invoice values are accepted, the sale cannot be doubted. In this view of the matter, the clearances under para 9.9 (a) of EXIM policy for DTA sales cannot be questioned. d. No provision exists to show that an EOU cannot manufacture excisable goods to be removed to DTA sales, therefore, the finding of the Commissioner that the conversion and clearance in DTA in this case was not allowed under EXIM Policy cannot be upheld, since the EXIM Policy para on DTA sales permits the clearance of goods for sale in DTA area up to 50% of the value of the exports effected. The stipulation i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods, which were cleared by 100% EOU to DTA whether in terms of permission granted or in excess and the instructions issued vide Circular No. 618/9/2002-CX, dated 13-2-2002 has not been upheld as the submission made by the ld. Advocate, which merit the consideration to reject the proposals made in the SCN to levy duty under main Section 3(1). f. The Notices on a perusal also reveal that the rates of duties as applicable under the Customs Act have been applied to quantify the demands. That would indicate that the Department itself admits the goods to be clearances by an EOU as prescribed under second proviso to Section 3(1). Properly accepting clearances of an EOU for the purposes of quantifying the duties and not be considered as clearan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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