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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 ..... is made. That the sale in excess of 50% of FOB value of export is not eligible in terms of condition no. 2 (ii) (b) of Notification No. 23/2003 CE dt. 31.03.2003. The adjudicating authority confirmed the demand and also imposed equal amount of penalty. Therefore, the appellants are before us. 2. Shri M.H. Patil, Ld. Counsel for the appellant submits that the condition no. 2 (ii) (b) of the Notification No. 23/2003 CE dt 31.03.2003 does not stipulate the period during which such DTA Sales entitlement is to be utilized. That from cumulative reading of Para 6.8 of FTP and the related guidelines it is clear that the DTA Sales entitlement 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 accru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Ltd. the demand were dropped holding that the value of clearances were within the permission limits of the Development Commissioner and that the 50% of the FOB value of exports allowed to be cleared into DTA would relate back to the year of accrual and entitlement and not to the year of clearance. They have also annexed the said orders to the appeal. Without prejudice to his above submission he also submits that the condition no 2 (ii) (b) does not apply to goods manufactured wholly from indigenous raw material and in their case the serial no.3 of the Notification No. 23/2003 CE is also applicable in their case and the clearances were made in accordance with the same. That out of the clearances of Rs. 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 Rs. 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 Rs. 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 als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DTA stated in notification are required to be read in conjunction with the wordings does not exceed 50% of the FOB value of exports made during the year (starting from 1st April of the year ending with 31st March of the next year) . The interpretation made in SCN is correct and the Para 6.8 of FTP stated in serial no. 2 of the Notification is only for reference and also for implementation of FTP and the same are not relevant to applicability of rates. He submits that the Appellant s reliance upon orders passed on same issue in favour of other assessee cannot be made applicable as the same are not correct. He relies upon 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 sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the year and ending with 31st march of next year) by the said unit; (c) the balance of the production of the goods which are similar to such goods under clearance into Domestic Tariff Area, is exported out of India or disposed of in Domestic Tariff Area in Paragraph 6/9 of the Foreign Trade Policy; (iii) clearance of goods into Domestic Tariff Area under sub-paragraphs (a), (d), (e) and (g) of paragraph 6.8 of the Foreign Trade Policy shall be allowed only when the unit has achieved positive Net Foreign Exchange Earning; and (iv) clearance of goods into Domestic Tariff 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/Remna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be sold in the DTA subject to achievement of positive NFE on payment of applicable duties within the overall entitlement of paragraph 6.8 (a). Sale of by-products by units not entitled to DTA sales or beyong the entitlements of paragraph 6.8 (a) shall also be permissible on payment of full duties." 6. That the guidelines for sale of goods in DTA by EOU, as mentioned in Para I(c), (d), (f) and (h) of Appendix 14-I-H, has also to be. taken into account for consideration of the aforesaid sub-paras, are as reproduced below: "I. DTA SALE ENTITLEMENT 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the FTP, in that case it is to be understood that permission has to be complied in reference to value on basis of which the same has been given. Hence it is clear that the restrictions placed with reference to 50% FOB Value is in context of year based upon which the DTA permission has been granted and the jurisdictional Customs/ Excise authorities of the unit has to ensure that the DTA sale made by the unit does not exceeds the said entitlement limit. The said condition in notification is in terms of policy and not 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 ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 (Tri) as upheld by the Honble Apex Court in 2007 (215) ELT A102 (SC). We are also in agreement with the submission made by the Appellant that if two interpretations are possible the one beneficial to the assessee has to be preferred. Our views are based upon the judgments in case of Ispat Industries Ltd. - 2006 (202) ELT 561 (SC) and Craft Interiors Pvt. Ltd. 2006 (203) ELT 529 (SC), Sun Export Corporation 1997 (93) ELT 641 (SC). 13. We further find that the adjudicating authority has refused 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 Po ..... X X X X Extracts X X X X X X X X Extracts X X X X
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