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TMI Blog2018 (11) TMI 355X X X X Extracts X X X X X X X X Extracts X X X X ..... emption by Revenue is that in the amended Notification No. 46/2004-CE dated 06.09.2004 explanation (II) was inserted, in accordance to which the goods received from 100 % EOU shall be treated as imported goods and by a further amended Notification 29/2007-CE dated 06.07.2007 the explanation (II) was substituted, according to which in addition to the goods procured from 100 % EOU, the goods received from DTA under benefit of deemed export under paragraph 8.3 (a) and (b) of the Foreign Trade Policy shall also be treated as imported goods. On this basis the SCN contends that the goods manufactured and cleared in DTA by use of raw-material procured from EOU as well as from indigenous Vendor against invalidation of Advance Authorization are treated as imported goods, hence, the finished goods is not eligible for exemption under serial no. 3 of Notification 23/2003-CE dated 31.03.2003. Accordingly, the demand of Rs. 1,87,87,516/- was proposed under the proviso to Section 11A (1), the interest under Section 11AA was proposed to be demanded, the penalty under Section 11AC was also proposed to be imposed. The show cause notice was culminated into adjudication order which is impugned herein, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n made. In support of his submission, he placed reliance on the following judgments:- * Anand Nishikawa Co. Ltd Vs. CCE, Meerut, 2005 (188) ELT 149 (SC) * Meghmani Industries Ltd. Vs. CCE, Ahmedabad-I, 2010 (261) ELT 411 (tri.Ahmd.) * Jain Grani Marmo Pvt. Ltd Vs. CCE, Jaipur- II, 2009 (246) ELT 754 (Tri.Del.) * Emcure Pharmaceuticals 2014 (307) ELT 180 (T) affirmed by Hon'ble Bombay High Court in 2016 (342) ELT 172 (Bom.) * Madhu Silica Pvt. Ltd 2016 (344) ELT 1072 (T) 3. He submits that the Revenue had also issued no dues certificate to the appellant at the time of their exit from EOU scheme, thereby the Revenue had sufficiently examined the record of the appellant and therefore the charges of suppression and consequently, invoking of extended period and levy of penalty under Section 11AC is not sustainable. As regard, enforcement of Bond B17, he submits that the department has no power to enforce the Bond and the same can be done only by the Civil Court as held by this Tribunal in the case of Shri Dudhganga- Vedganda SSK Ltd. 1987 (29) E.L.T. 22 (T). As regard merit of the case, he submits that as per the Hon'ble Supreme Court judgment in the case of Favourite Industr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of raw material was permitted by the departmental authority and CT3 procedure was followed. The sample of CT3 is scanned below: From the above CT3, it can be seen that the CT3 was signed by Jurisdictional Superintendent permitting the appellant for procurement of raw material. It is also observed that the appellant in their ER2 Return, filed from time to time to the department, has clearly declared that they are availing the Exemption Notification No. 23/03-CE under particular serial number, i.e. serial number 3. The sample copy of the ER2 Return is also scanned below: It is also observed that the appellants excise records were also audited during the relevant period. As a token of proof of such audit copy of appellants' record being confirmation of audit is scanned below: From the above undisputed facts, it is clear that the procurement of raw material from 100% EOU/Advance License Holder, the manufacture of goods out of such raw material and removal of finished goods in DTA under Exemption Notification 23/03-CE under exemption serial No. 3 were disclosed to the department, therefore, there is absolutely no suppression of fact on the part of the appellant. Moreover, the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same, the Revenue is before us. 3. In their appeal memorandum it has been urged that under the self-removal procedure, it is the responsibility of the assessee to determine and discharge correct duty liability and, therefore, if this responsibility cast on the assessee is not discharged, then duty demands can be enforced in terms of the B-17 Bond executed without any time-limit. Reliance is placed on the decision of the Tribunal in the case of Endress + Hauser Flowtec (I) Pvt. Ltd. vs. Commissioner of Central Excise, Aurangabad 2009 (237) ELT 598. 3.1. The learned Additional Commissioner (AR) appearing for the Revenue reiterates the grounds urged in the appeal memorandum. 4. The learned counsel for the respondent submits that the impugned order merits to be sustained inasmuch as the appellant had intimated to the department vide letter dated 14/06/2004 informing the jurisdictional Dy. Commissioner that they had obtained permission for advance DTA sale and they would be effecting clearances on payment of appropriate Central Excise duty. In the ER-2 returns filed by the respondent, the respondent had clearly indicated that they have been effecting advance DTA clearances un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. He would submit that they arise from the erroneous understanding of the Tribunal with regard to the applicability of Section 11A of the Central Excise Act, 1944 and secondly, the concessional rate of duty in terms of serial No. 3 of Notification No. 23/2003-C.E., dated 31-3-2003. These are substantial questions of law, according to Mr. Bangur, for the show cause notice was issued on 3-7-2009, within a period of five years. The assessee was working under a scheme of self removal procedure and it was for them to have availed of the Notification if that was applicable. In the present case, there was a wilful misstatement and until the evasion was discovered, it was not possible for the Revenue to proceed. The extended period of limitation is rightly invoked. 3. Upon a reading of the Tribunal's order, we are unable to agree. The Tribunal found and as a matter of fact that whatever may be the procedure adopted and if it contravenes the law, the Department should have taken prompt action. The Department though in the know of things on 14-6-2004, allowed the assessee to avail of the benefit of the above Notification. The Tribunal found that the returns were filed in which the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.2011 was issued demanding duty of Rs. 1,33,22,958/- as duty payable according to Serial No. 2 of table to Notification No. 23/2003-CE. Provisions contained in Serial No.2 were amended periodically under Notification No. 22/2006-CE dated 01.3.2006 and 10/2008-CE dated 01.3.2008. In view of these amendments carried out in Notification No. 23/2003-CE rate of duty, as per Serial No. 2 of the table to this exemption, was required to be reduced by 75% for the period 01.3.2006 to 28.02.2006 and by 50% with effect from 01.3.208. These changes proposed in the corrigendum dated 18.6.2012 have been suggested as per paragraph 2(d) of the corrigendum as follow:- "2(d) In view of the above amendments, as per S. No. 2 of the Table of the said exemption Notification No. 23/2003-Central Excise dated 31st March, 2003, the rate of Basic Customs Duty was reduced by 75% from 01.03.2006 to 28.02.2008 and by 50% with effect from 01.3.2008 and whereas other duties are leviable at full tariff rate on DTA sale of finished goods by a 100% EOU. Thus, M/s. MSPL is liable to pay Basic Customs duty at the rate of 2.5% up to 28.02.2008 and subsequently, w.e.f. 01.3.2008, they were liable to pay Basic Customs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rk was made by the Bench that demand can be raised against a 100% EOU by enforcing B-17 Bond without any time limit. It is also observed that the same Bench later in the case of Sterlite Optical Technologies Limited vs. CCE, Aurangabad [2011 (270) ELT 266 (Tri. Mum.)], after considering Endress+Hauser Flowtec (I) Pvt. Limited vs. CCE, Aurangabad (supra) earlier decided by the same Bench, gave an opinion that Section 28 of the Customs Act, 1962 is the only provision to demand duty if the conditions of a notification are not fulfilled. Still a later case law of CESTAT Mumbai in the case of CCE, Pune vs. Emcure Pharmaceuticals Limited (supra) also distinguished the case law Endress+Hauser Flowtec (I) Pvt. Limited vs. CCE, Aurangabad (supra) by making following observations in Para 5:- "5.?We have carefully considered the submissions made by both the sides. From the records it is clearly seen that the respondent had declared to the department that they would be availing the benefit of Notification 23/2003 in respect of advance DTA sales to be effected by them in terms of the permission granted by the Development Commissioner as early as in 2004 itself. Therefore, the respondent canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oubt a Clause in Para 12 of the B-17 Bond dated 30.6.2014 exists for goods manufactured and cleared in DTA which reads as follow:- "12. We, the obligators, shall if the articles so manufactured are and are allowed to be sold in India in such quantity and subject to such other limitations and conditions as may be specified in this behalf by the Director General of Foreign Trade, pay duty of excise leviable on such articles under Section 3 of the Central Excise Act, 1944 and shall pay duty of excise leviable on such article under Section 3 of Central Excise Act, 1944 and duty of Customs & Central Excise leviable on the Raw materials/ Component part used in the manufacture of such articles as are not allowed to be sold in India in accordance with the provisions of Exim Policy." No condition so specified in this regard by DGFT has been brought to our notice. As no duty is foregone even Notification No. 23/2003-CE dated 31.3.2003, as amended, does not require execution of a Bond for DTA clearances by the appellant when the same is issued under Section 5A(1) of the Central Excise Act, 1944. Main appellant has been filing duty payment returns and all intimations of receipt of inputs w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that supplier of goods was taking benefit under Para 8.3(a) and (b) of FTP then appellants also can not presume of such benefits being availed by the supplier. There is no evidence on record that appellants were aware of GHCL availing deemed export benefit under Para 8.3(a) and (b) of FTP. Revenue is not able to bring any evidence on record that GHCL has availed the benefit of Para 8.3(a) and (b) of the FTP. It is observed from the case records that M/s. GHCL Limited vide letter dated 28.11.2011 written to Senior Intelligence Officer, Office of the DGCEI, Navarangpura, Ahmedabad did send copies of two DFIA Licenses No. 0810079587 dated 27.4.2009 and 0810081427 dated 14.07.2009. No copy of these DFIA licenses was furnished by the Revenue before the Bench and also there is no indication whether appellants were shown copies of these DFIA licenses during investigation to the fact that these licenses had endorsements of paragraph 8.3(a) and (b) of Foreign Trade Policy on the face of these DFIA licenses. In view of the above, extended period of five years can not be invoked against the main appellant under proviso to Section 11A of the Central Excise Act, 1944 as there is no evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) of the FTP for the raw materials supplied to them, the Revenue has also not established whether they knew that the raw materials received by them were to be treated as imported goods for the purpose of Notification No. 23/2003-CE, the Revenue has also not established that they were required to pay excise duties on DTA clearances at the rate prescribed underSI.No.2 of the above Notification because they had used raw materials procured in the above manner for manufacture of the finished goods cleared in DTA, and the Revenue has also not established that they had deliberately suppressed certain relevant facts though they knew about the same and that therefore they were guilty of deliberate suppression of facts with an intent to evade payment of Central excise duty on DTA clearances. The larger period of limitation is therefore invoked illegally and without jurisdiction. 8.1 In view of the above, it is not correct to say that appellants have not contested the issue on merits. However, the argument taken by the appellants that DFIA licenses could also be issued under paragraphs 8.4.2, 8.4.3, 8.4.4 (iv) and (v) before this Bench, was not taken up before the adjudicating authority. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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