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TMI Blog2019 (8) TMI 719X X X X Extracts X X X X X X X X Extracts X X X X ..... f Customs Act, 1962 and the Customs Tariff Act, 1975. There is no dispute that the impugned goods are a waste product and have been subject to the process of assessment as decreed by law. There is also no dispute that the impugned goods have materially altered from the raw materials utilised for manufacture and were not the duty free goods removed as such. The only issue that arises is the discharge of duty liability and the dispute is limited to the non-payment of duty arising from non-dutiability. The scheme of export oriented unit is intended to provide special facilities to units that are engaged in export and even in the matter of clearance of domestic tariff area are subject to higher duties than a corresponding domestic unit is. The policy prescription also includes a ceiling on the quantity of goods that may be sold in the domestic market. A unit operating outside the scheme is subject only to the duties of excise on their finished products and there is no limit on the clearance that may be effected from the factory. The scheme of conditions in the exemption notifications under the Central Excise Act, 1944 and Customs Act, 1962 are intended to ensure that a unit operat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsumables that have been procured domestically and from outside the country without payment of duty were utilized. In all these notifications, the relevant condition is Notwithstanding anything contained in the notification, the exemption contained herein shall also apply to the said goods used for the purposes of production, manufacture, processing or packaging of articles in a user industry and such articles (including rejects, waste, scrap and remanants arising out of such production, manufacture, processing or packaging of such articles) even if not exported out of India, are allowed to be cleared outside the user industry under and in accordance with the Export-Import Policy and subject to such other limitations and conditions as may be specified in this behalf . on payment of appropriate duty of excise .. . 3. Units under the referred scheme are privileged with procurement of duty free inputs for manufacture of output that are to be exported. As an exception to this obligation, the utilisation of inputs so procured in goods that are sold in the domestic market is also relieved of the burden of duties. It is the case of original authority, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich is presently nil . It has been held by the Supreme Court in the case of Vazir Sultan Tobacco Company Ltd. that excisable goods do not become non-excisable goods merely because of the exemption given under the Notification. As the cotton waste is excisable goods, Second Proviso to Notification No. 1/95-C.E. is not attracted. Accordingly, we reject the Appeal filed by the Revenue. besides which, in Clancey Precision Components Pvt Ltd v. Commissioner of Central Excise Customs, Pune [2007 (216) ELT 242 (Tri-Mumbai)], the issue itself has been decided by the Tribunal. Further, reliance is placed on a series of other decisions of the Tribunal viz. Hanil Era Textile Ltd v. Commissioner of Central Excise Customs [2004 (171) ELT 33 (Tri-Mumbai)], which has been upheld by the Hon'ble Supreme Court, in Sesame Foods Pvt Ltd v. Commissioner of Central Excise, Jaipur-I [2016 (343) ELT 970 (Tri- Del)], Synergies-Dooray Automotive Ltd v. Commissioner of Central Excise, Visakhapatnam-I [2008 (226) ELT 529 (Tri-Bang.)] and Indira Printers v. Commissioner of Central Excise, Delhi-II [2010 (262) ELT 940 (Tri-Del)]. 7. Learned Authorised Represen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f both the sides. The 100% E.O.Us. are provided facilities, among other things, of importing capital goods, raw-material, components etc. without payment of customs duty and also of obtaining similar goods from domestic market without payment of Central Excise duty. These units have also been provided facility to sell a specified quantity of their products in Domestic Tariff Area in India. Section 3 of the Central Excise Act provides that the duty of excise shall be an amount equal to the aggregate of the duties of Customs on like goods produced or, manufactured outside India, if imported into India. It is thus apparent that the nature of duty levied on the goods manufactured by the 100% E.O.U. is Central Excise Duty whereas the measure of collection of duty is Custom duty. Section 3 (1) of the Act nowhere provides that in addition to the Central Excise duty which is aggregate of customs duty, the 100% E.O.Us. have to pay separately customs duties also. The measure of collection of duty does not change the nature of duties required to be paid by 100% EOU that is Central Excise Duty if goods are cleared to any other place in India. As Notification No. 8/96 provides Nil rate of duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision of the Constitution Bench of the Hon'ble Supreme Court in re Dhiren Chemical Industries, reference arose in view of the conflict between the decisions in Collector v. Usha Martin Industries [1997 (7) SCC 47] and Motiram Tolaram v. Union of India [1999 (6) SCC 375] on the duty liability of inputs that were cleared without duty for use in the manufacture of final product on which duty has been paid but were utilised in manufacture of exported finished goods. In that context, and in accordance with the policy imperative behind such an exemption, the Hon'ble Supreme Court held that 6. An exemption notification that uses the said phrase applies to goods which have been made from duty paid material. In the said phrase, due emphasis must be given to the words has already been paid . For the purposes of getting the benefit of the exemption under the notification, the goods must be made from raw material on which excise duty has, as a matter of fact, been paid, and has been paid at the appropriate or correct rate. Unless the manufacturer has paid, the correct amount of excise duty, he is not entitled to the benefit of the exemption notification. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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