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TMI Blog2018 (12) TMI 1175X X X X Extracts X X X X X X X X Extracts X X X X ..... digenous and procured under CT-3, the duty would be Excise Duty equal to aggregate duty of Customs. When materials are imported it would be Customs Duty. (iii) Once input duty is paid, only normal excise duty is payable on final goods removed without permission. The appellant's contention of incorrect duty calculation is admitted partially. The duty is reworked on the principle enumerated above. The duty liability is reduced to Rs. 16,63,038 as against the total duty liability of Rs. 48,34,138/- as detailed in the table Annexed to this Order. Consequently, the penalty under Section 11AC stands reduced to Rs. 16,63,038. The Revenue has filed an appeal against said observation of the Commissioner (Appeal). 2. Ld. AR pointed out that in the instant case, the respondent has manufactured the goods in 100% EOU and allegedly cleared the same in DTA area without permission of the Development Commissioner. He argued that the Commissioner has wrongly held that procurements from EOU, which are treated as deemed export for the supply to EOU, should be treated as deemed import of the recipient EOU. In those circumstances, duty liability should arise under the Proviso to section 3 (1) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said Second Schedule : Provided that the duties of excise which shall be levied and collected on any excisable goods which are produced or manufactured, - (i) in a free trade zone and brought to any other place in India; or (ii) by a hundred per cent export-oriented undertaking and allowed to be sold in India, shall be an amount equal to the aggregate of the duties of customs which would be leviable under Section 12 of the Customs Act, 1962 (52 of 1962), on like goods produced or manufactured outside India if imported into India, and where the said duties of customs are chargeable by reference to their value; the value of such excisable goods shall, notwithstanding anything contained in any other provision of this Act, be determined in accordance with the provisions of the Customs Act, 1962 (52 of 1962) and the Customs Tariff Act, 1975 (51 of 1975)." 22. After the amendment the relevant part of the provision reads as under :- "Section 3. Duties specified in the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Government of India and sought debonding of its unit from 100% EOU, i.e., withdrawal from 100% EOU Scheme. By letter dated 18-10-1993 of the Ministry of Commerce it was agreed in principle to allow the appellant to withdraw from the 100% EOU Scheme subject to the conditions on which withdrawal was permitted. Once the debonding of the unit was permitted, finished goods earlier manufactured in the 100% EOU could be cleared for domestic tariff area (DTA) on levy of duty of central excise. The dispute arose as to what rate of duty was to be levied. The contention of the assessee was that excise duty is payable on the finished goods under the main Section 3(1) of the Act together with customs duty on the imported raw material used in the manufacture of the said finished goods lying in the stock. The Revenue on the other hand contended that excise duty under the proviso to Section 3(1) of the Act was payable on the finished goods and with no customs duty being levied on the raw materials gone into the manufacture of finished goods. The Court encapsulated the issue by stating that the expression "allowed to be sold in India" appearing in the proviso to Section 3(1) of the Act was the bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as modified from time to time and corresponding amendments to Section 3 of the Act the expression "allowed to be sold in India" in the proviso to Section 3(1) of the Act is applicable only to sales made up to 25% of production by 100% EOU in DTA and with the permission of the Development Commissioner. No permission is required to sell goods manufactured by 100% EOU lying with it at the time approval is granted to debond." 24. After so stating the Court noted the stand of the revenue that by debonding permission had been granted by BoA for selling the closing stock of finished goods in India. Negativing the said contention, the Court held :- "By its application dated 8-9-1993 the appellant had only asked the Central Government for permission to debond the unit. Pending formal debonding clearance, the appellant requested the Central Government that it might allow it to sell the goods in India. This request of the appellant was never acceded to by the authority concerned and letter of debonding was issued. This application of the appellant, therefore, could not be treated as an application for permission to sell in India as contended by the Revenue and the debonding letter of BoA ..... X X X X Extracts X X X X X X X X Extracts X X X X
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