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TMI Blog2018 (2) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... missions which may be different for each quarter or half year or on yearly basis. Thus there is no co-relation between the DTA Sales permissions granted from time to time and actual DTA Sales since it is not mandated in FTP. Once the benefit of DTA Sale has been extended by the Competent Authority i.e Development Commissioner then said benefit cannot be withdrawn. The N/N. 23/2003 CE has been structured so as to ensure the implementation of FTP Policy in its correct prospective. The same cannot be read as to make it contrary to the provisions of the FTP. The permission to DTA sale has accrued to the Appellant Unit based upon its past export performance. If the export of the subsequent year after allowing such DTA Sale is applied in order to restrict this benefit this would lead to situation that the permission for DTA Sale by the Development Commissioner would become redundant. In case where the EOU Unit has become entitled for DTA sale in next year and in said next year it does not export its goods, the DTA sale allowed to him cannot be refused or withdrawn. Once the Development Commissioner has given permission to sell the goods in DTA upto certain value the revenue cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent will accrue every year, subject to condition of positive NFE; the DTA sale entitlement in any year(s) within a block of 5 years is to be seen with reference to cumulative value of imports and export(s) of earlier year (s). Such entitlement can be availed of within three years of accrual thereof. Under Para 6.8 (a) of the FTP the EOU can sell upto 50% of the FOB value of the exports at concessional rate of duty only upon the satisfaction of the contingent condition of positive NFE. There is no condition prescribed in FTP that the benefits must be accrued and utilized in each financial year (1st April to March 31st). It is clear that the condition of restricting to 50% of the value of export goods is merely reflective of the provisions of the Para 6.8 (a) of the FTP. It must be interpreted that it follows the entirety of the scheme including the provisions of Para (d) and Para (h) of the guidelines to Para 6.8. The term during the year is merely a measure for determining the quantum of exports undertaken in a qualifying period and is not a restrain which restricts the facility or benefit of the concession to one financial year at a time. When the inherent scheme under Para 6.8 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were made in accordance with the same. That out of the clearances of ₹ 66,46,08,467/- on which duty has been demanded, the clearances of 65,05,77,211/- is on goods made out of indigenous raw material and hence the clearance of goods valued at ₹ 1,40,31,256/- has been made by taking benefit under Sr. No.2 of Notification in question on which duty demand shall be only of ₹ 14,25,055/-. He also submits that even if it is assumed that demand made in SCN is correct than too the clearances upto 50% of FOB value would be entitled for the exemption. He also submits that the demands are barred by limitation. The SCN has invoked extended period on ground that the revenue has come to know of clearances from ER-2 Returns for the month of April 2006 which is incorrect as in each month ER-2 Returns the value of FOB Value of Exports and DTA sales were shown. Their unit is working under physical supervision of Central Excise officers and the Bond officers are posted for which they were paying cost recovery charges. The clearances of goods into DTA was done under central excise invoice which was countersigned by the Bond Officer. Sale of the goods under DTA has been under scrutin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon the judgment in case of Faridabad CT Scan Vs. D.G. Health Services 1997 (95) ELT 161 (SC), Hitachi Home Life Solutions (India) Ltd. Vs. C.C (Imports), Nhava Sheva 2014 (300) ELT 457, Bombay Hospital Trust Vs. CC, Sahar 2005 (188) ELT 374 (TRI-LB). The department has not questioned the quantum of entitlement or against the provisions of policy. As regard alternative submission of the Appellant that the goods being produced from indigenous raw material is eligible for concessional rate of duty of 4% which was paid in terms of serial no.3 of the notification, he submits that the same is not correct. The DTA Sale permission does not distinguish between the goods manufactured from the indigenous goods or imported goods and therefore the serial no. 3 of the notification is not applicable in the case. It is applicable only in reference to unit as whole and not with reference to goods, hence the exemption is not applicable in terms of serial no.3 of the notification. That the benefit of cum duty cannot be granted. He also relies upon the judgment of Hon ble Apex Court in case of CCU Vs. B.V. Jewels 2004 (172) ELT 3 (SC), CCE Vs. Modi Alkalies Chemcials Ltd. 2004 (171) ELT 155 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ff Area under sub-paragraph (d) of Paragraph 6.8 of the Foreign Trade Policy in excess of 5% of free on board value of exports made by the said unit during the year starting from t= April of the year and ending with 31st March of the next year shall be allowed only when the unit has achieved positive Net Foreign Exchange Earnings xxxxx xxxxx xxxxx 5. That the aforesaid conditions are necessarily required to be interpreted in the light of sub-para (a), (d), (e) and (g) of Para 6.8 of Foreign Trade Policy, 2004-09 (FTP), as reproduced below: 6.8. DTA Sale of Finished Products/Rejects/ Waste/Scrap/Remnants and By-products The entire production of EOU/EHTP/STP/BTP unit shall be exported subject to the following: (a) Units, other than gems and jewellery units, may sell goods upto 50% of FOB value of exports subject to fulfillment of positive NFE on payment of concessional duties. Within the entitlement of DTA sale, the unit may sell in DTA its products similar to the goods, which are exported or expected to be exported from the units. No DTA sale at concessional duty shall be permissible in respect of motor cars, alcoholic liquors, books and tea cc(except ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LEMENT FOR EOU UNITS: xxxxx xxxx xxxxxx (c) Units may opt for DTA sales on a quarterly, half-yearly or annual basis by intimation to the concerned Development Commissioner of the SEZ. (d) The DTA sales entitlement shall be availed on within three years of the accrual of entitlement. xxxxx xxxxxx xxxx xxxxxx (f) Advance DTA sale permission not exceeding the entitlement accruable `on the exports envisaged in the first year shall be permitted and such sale shall be adjusted against the subsequent entitlements in a maximum period of two years. However, drugs and pharmaceuticals unit can make advance DTA sale of the production on the exports envisaged in the first two years adjustable against subsequent entitlements within a maximum period of three years from the date of commencement of production by the unit. The Unit shall be required to execute a bond with the Assistant Commissioner Customs/Central Excise concerned to cover the difference between the amount of duties paid on the advance DTA sale and the full duties applicable on such goods. (h) The DTA sale entitlement would accrue only if the unit has achieved positive NFE on cumulative basis. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot to be interpreted otherwise. Condition No. 2 (ii) (b) of the notification No. 23/2003 CE only empowers the authority to check that the sale value does not exceed the 50% FOB value of exports as permitted by the Development Commissioner since in absence of same it is not possible to check the correct compliance of exemption. If the same is interpreted differently, it would lead to absurdity of DTA sale permission as it would mean that both the accrual and utilization of the entitlement i.e 50% of the FOB value clearance in DTA should happen in the same financial year and the balance left or unutilized cannot be carried forward which would render the benefit of 3 year time period to make DTA clearances otiose. 10. The Notification in respect of EOU is issued to effectuate the benefit premandated under the FTP which is clear from the text of notification no. 23/2003 CE as it specifically provides that a benefit of exemption is granted to an EOU in respect of the goods produced in the EOU and brought to another place in India in accordance with provisions of FTP . The notification in question ensures the compliance of the FTP benefit and restrictions and has to be read in that co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efused to accept the alternate submission of the Appellant for grant of benefit under serial no. 3 of the notification in question on the ground that the said condition is applicable to the unit producing goods from indigenous goods and would not be available where the unit is producing goods from the indigenous goods as well as imported goods. The relevant condition is respect of serial no. 3 of the notifications is as under : If,- (i) The goods are produced or manufactured wholly from the raw materials produced or manufactured in India; (ii) the goods are cleared into Domestic Tariff Area in accordance with sub-paragraphs (a), (b), (d) and (h) of Paragraph 6.8 of the Export and Import Policy; and (iii) such finished goods, if manufactured and cleared by the unit other than export oriented undertaking are not wholly exempt from duties of Excise or are not chargeable to NIL rate of duty. The above conditions nowhere debars the EOU from availing exemption in case where the EOU is manufacturing goods from indigenous raw material as well as imported raw material. It is only to be ensured that the goods cleared in DTA are made up of indigenous raw material onl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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