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TMI Blog2015 (11) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... he Respondent : Mr. V. Lakshmikumaran, Adv., Mr. M.P. Devanath, Adv., Mr. S. Vasudevan, Adv., Ms. L. Charanaya, Adv., Ms. Shagun Arora, Adv., Mr. Hemant Bajaj, Adv., Mr. Anandh K., Adv., Mr. Aditya Bhattacharya, Adv. And Mr. T.D. Satish, Adv. ORDER 1. These appeals arise out of a judgment dated 19 th December, 2006 passed by CESTAT, West Zonal Bench, Ahmedabad, dealing with nine appeals against three orders in original passed by the Commissioner of Central Excise, and judgments of CESTAT which apply and follow the aforesaid judgment. By the judgment dated 5.12.2006, excise duty amounting to Rs. 4,26,93,826/-, Rs. 7,22,75,718/- and Rs. 7,10,10,030/- along with penalty of Rs. 4,26,93,826/-, Rs. 5 crore and Rs. 5 crore have been imposed Si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nything contained in any other provision of the Central Excise Act be determined in accordance with the provisions of the Customs Act, 1962 and the Customs Tariff Act, 1975. The EPCG licence holders were entitled to concessional rate of basic customs duty @ 5% ad valorem or 10% ad valorem as the case may be and were exempted from additional duty and special additional duty in terms of notification No. 28/97 dated 1.4.97, notification No. 49/00 dated 27.4.2000 and notification No. 44/2002, 55/2003-Cus in force during the relevant period. The appellants have supplied the goods to these EPCG licence holders on payment of concessional Customs duty at the applicable rate by availing the benefit of the said notifications, and cleared the same to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that Section 3 of the Central Excise Act creates a legal fiction by which all sales made by these EOU's in the domestic tariff area to EPCG licence holders were to be governed by the Customs Act and Customs Tariff Act, and hence exemption notifications under these Acts alone were to be seen. 4. Section 3 of the Central Excise Act, as it stood at the relevant time, states: "Section 3. Duties specified in First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 to be levied. - (1) There shall be levied and collected in such manner as may be prescribed, - (a) a duty of excise to be called the Central Value Added Tax (CENVAT)] on all excisable goods (excluding goods produced or manufactured in special econ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leviable for the time being in force is leviable at different rates, then, such duty shall, for the purposes of this proviso, be deemed to be leviable at the highest of those rates. Explanation 2. - In this proviso, - (i) "free trade zone" means a zone which the Central Government may, by notification in the Official Gazette, specify in this behalf; (ii) "hundred per cent export-oriented undertaking" means an undertaking which has been approved as a hundred per cent export-oriented undertaking by the Board appointed in this behalf by the Central Government in exercise of the powers conferred by section 14 of the Industries (Development and Regulation) Act, 1951 (65 of 1951), and the rules made under that Act.; (iii) "Special Ec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustoms duty payable on such like goods if produced or manufactured outside India and imported into India. Therefore, all clearances by 100% EOUs have to be treated as imports for the purpose of calculating the duty. What is required to be determined/quantified is the Customs duty and not the Central Excise duty. Once Section 3 itself creates a legal fiction of levying customs duty and treating clearances by 100% EOUs at par with imports, the question of altering nature of levy and the exemptions by circulars does not arise. The Commissioner has totally misunderstood the circulars which made it abundantly clear that notifications applicable to units working under EPCG schemes shall be equally applicable to goods being procured from 100% EOUs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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