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TMI Blog2016 (4) TMI 771X X X X Extracts X X X X X X X X Extracts X X X X ..... he brief facts of the case are that the appellant assessee was a 100% Export Oriented Unit (E.O.U.). In September, 2005 they applied for permission to exit the E.O.U. scheme which was granted in principle on 27.09.2004 by the Development Commissioner. The permission is subject to the assessee paying applicable Customs/Excise Duties on the goods lying in stock. Based on the in principle approval by the Development Commissioner, the assessee approached the Central Excise Department for debonding their unit and to pay the duty liability on raw-materials, consumables, capital goods and the finished goods the present dispute is relating to quantum of duty payable on finished goods lying in stock at the time of debonding of the E.O.U. The appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by itself is permission to sell goods in India. Though the expression allowed to be sold in India used in Proviso to Section 3 was replaced by the expression brought to any other place in India with effect from 11.05.2001. The ratio followed by the Hon ble Supreme Court will continue to apply thereafter also. 5. The ld. A.R. reiterated the findings in the impugned order and supported the demand on the following grounds. (a) The exemption in terms of Notification No.23/2003-CE on the finished goods in an E.O.U. at the time of debonding is not available. This has already been conceded by the appellant/ assessee. As the said Notification applies only to functioning E.O.U. and not in respect of debonding E.O.U. (b) The decision of the Hon bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ebonding of E.O.U. is to be in terms of main Section (3) (1) or proviso to Section 3 (1) of the Central Excise Act, 1944. As stated earlier originally the proceedings against the appellant / assessee was to deny the concession claimed by them in terms of Notification No.23/2003- CE. Now both the sides agree that the said Notification is not applicable to the appellant assessee in respect of finished goods at the time of debonding. However, the appellant / assessee is contending that they are liable to duty on the finished goods only in terms of main Section 3 (1), in other words, as if the goods are manufactured and cleared by a normal Central Excise Unit. The case of the Revenue is that the duty calculation has to be in terms of proviso to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0% Export Oriented Undertaking and brought to any other place in India shall be an amount equal to aggregate of duties of customs .. The term allowed to be sold in India was interpreted by Supreme Court to mean only goods which are permitted to be sold by the Development Commissioner in respect of their functioning E.O.U. This much has been categorically held by the Hon ble Supreme Court in Siv Industries (supra). Apparently, after the substitution of the terms in 2001 the proviso to Section 3 (i) cannot be restrictively interpreted to apply to such finished goods, which are only permitted to be sold in India by the Development Commissioner. It is clear that the scope of the term as per the revised proviso to Section 3 (i) is much wider and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority will assess the duty payment and the unit will pay the duty so assessed and obtain no due certificate from the excise authority. During the period between such payment of customs duty and obtaining the final debonding letter, the unit will not be entitled to claim any exemption for procurement of capital goods or inputs. It is therefore, clear that at the time of debonding, the question of availing the benefits available to DTA unit cannot arise. 12. Both the authorities below on detailed discussions about applicability of the proviso the Section 3(1) of the said Act in the facts of the case have clearly applied the provisions of law as they are applicable to the facts of the case and therefore, we do not find any infirmity in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... U. to a D.T.A. Unit is legally permissible only on discharging all the duty liabilities on capital goods, raw-materials, finished goods etc. lying in the E.O.U. In such a situation, it is not legally tenable to argue that the rate of duty applicable to a normal Central Excise Unit should be applicable to a E.O.U. even before the E.O.U. becomes a normal Central Excise Unit. 13. After careful analysis of the facts of the case and legal position, we find no merit in the appeal filed by the appellant/ assessee and accordingly dismiss the same. 14. We find no merit in the appeal filed by the Revenue for the imposition of penalty under Rule 25 of Central Excise Rules 2002 on the appellant / assessee. As discussed above, the rate of duty applica ..... X X X X Extracts X X X X X X X X Extracts X X X X
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