9911796707
TMI Blog2021 (1) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s Centum Electronics Limited, Bangalore (formerly known as M/s Solectron Centum Electronics Limited), a 100% EOU engaged in manufacture of electronic goods such as hybrid micro circuits, resistors, etc; the Appellant had imported raw materials like fuses, resistors, gold wire, etc., claiming exemption from duty vide Customs Notification No. 52/2003-Cus dated 31.3.2003 applicable to the EOU/EHTP/STP, etc; the Appellant had used the raw materials imported under Notification No 52/2003 Cus in the manufacture of the final products viz Hybrid Micro Circuits, and Crystal Oscillators & Crystals and the same were cleared at Nil rate of Excise duty to ISRO and BEL who were eligible for exemption from Custom Duties vide Notification No 21/2002-Cus dated 01.03.2002 (for ISRO) and 39/96-Cus dated 23.07.1996 (for BEL). Revenue issued a Show Cause Notice, dated 08.10.2007, alleging that the appellant has wrongly availed the exemption on raw materials imported and used in the manufacture Hybrid Micro Circuits cleared to ISRO and Crystal Oscillators and Crystals cleared to BEL; it was also alleged that the Appellant did not have permission for DTA Clearances. The OIO and OIA confirmed Confiscati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No 23/2003 CE dated 31.3.2003; finished products even if not exported are allowed to be sold in DTA on payment of applicable duty of excise under Section 3 of the CEA, 1944. He relies upon: (i). CBEC Circular No 54/2004 Cus dated 13.10.2004 (ii). Sarla Performance Fibre Ltd vs CCE, Surat II 2016 (336) ELT 557 (SC) (iii). Vikram Ispat Vs CCE, Mumbai III 2000 (120) ELT 800 (T-LB) 6. Learned counsel for the appellants submits that Notifications No 21/2002 - Cus dated 1.3.2002 and 39/96 Cus dated 23.7.1996. are not applicable for clearance of the manufactured goods by the EOU in DTA. The EOU was liable to pay excise duty on the goods manufactured and cleared in DTA in terms of Section 3 of the Central Excise Act, 1944 read with Notification No 23/2003-CE dated 31.03.2003. Both the DTA buyers were entitled to import the goods directly under in terms of Para 3 of Notification No 52/2003 Cus which mandates that the assesse is liable to pay excise duty on the goods cleared in DTA in terms of Section 3 of the CEA, 1944; the appellant had not paid Excise duty on the finished goods cleared to ISRO & BEL in DTA; in case the excise duty was not paid, the Department ought to have demanded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 52/03- Cus dt.31.03.2003, is that the customs duty foregone on inputs is to be reversed by the importer on any of the two grounds: (1) If finished goods are non-excisable OR (2) The finished goods, if imported, are liable to "nil" customs duty (under First schedule as well as additional duty under Section 3 of Customs Act, 1962) either by way of tariff rate or by way of any exemption. 10. Learned Authorised Representative submits that accordingly, the issue to be examined is whether, any of the above conditions exist. Even if one of the conditions is true, then the demand of duty on inputs becomes sustainable. The finished goods, i.e. Hybrid Micro Circuits cleared to M/s ISRO and Crystal Oscillators and Crystals cleared to M/s BEL, are chargeable to 'Nil' rate of customs duty and Nil rate of Additional Duty subject to condition that the importer produces the required certificate from competent authority by virtue of Notification No. 21/02-Cus dt.1.3.2002 and 39/96-Cus dt.23.07.1996 respectively. In both the above cases, M/s SCEL have provided the requisite Certificates and Revenue has placed the same on record. The moot point is not regarding the eligibility of the appellants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicability would be on the assessee to show that his case comes within the parameters of the exemption clause and when there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity should be interpreted in favour of the revenue. 13. Learned Authorised Representative submits, as regards the confiscability, that Hon'ble High Court of Madras in the case of Visteon Automotive Systems India Limited Vs, CESTAT, Chennai 2018(9) G.S.T.L. 142(MAD)" held that once the power of authorization for confiscation of goods gets traced to Section 111 of the Customs Act, 1962, physical availability is not so much relevant. Penalty under Section 112(a) ibid flows from imposition of redemption fine which in turn flows from Section 111 ibid as held by Tribunal in the case of Venus Enterprises vs. Commissioner of Customs , Chennai, 2006 (199) ELT661 (Tri-Chennai). 14. Heard both sides and perused the records of the case. Brief point to be considered in this case is to decide as to whether the appellants are liable to pay duty on the raw materials which have been used in the manufacture of final products which have been cleared without payment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ants have cleared hybrid micro circuits to M/s. ISRO at 'Nil' rate of duty under Notification No.21/2002-Cus. dated 01.03.2002 and have cleared crystal oscillators and crystals to M/s. BEL under Notification No.39/1996. In both cases, Customs duty is 'Nil' and CVD is exempt. 17. We find that the appellants contend that the goods supplied in DTA to M/s. BEL and ISRO are not exempted from Central Excise duty as such, but exempt only when certain conditions are met and procedures are followed. The contentions of the appellants, based on the above and their reading of Circular No.54/2004-Cus. dated 13.10.2004 is that it could be inferred that only when both basic and additional duty of customs are exempt as per Tariff or based on general exemptions, not in the case of conditional exemptions. We find that CBEC vide above cited Circular clarified that: iii) DTA Sale by EOU/EHTP/STP Units: 8. Under the present dispensation, in case of DTA sale of goods manufactured by EOU/EHTP/STP, if basic customs duty and CVD are both 'nil' on similar goods when imported, no duty is payable by the EOU as per proviso to Section 3(1) of the Central Excise Act, 1944. Similar goods manufactured in DTA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll settled [2000 (120) E.L.T. 800] that goods produced in an EOU cannot be treated as imported goods and subjected to customs duty. The duty payable in respect of such goods is the duty of excise under Section 3 of the Central Excise Act, 1944. Therefore, the duty demand made in the impugned order under Section 28 of the Customs Act is not sustainable. Accordingly, we set aside the impugned order and allow the present appeal. However, we make it clear that revenue authorities will be at liberty to demand duty on the imported inputs, if any, used in the production of the cut-flowers in question. 19. Therefore, we find that as held by the adjudicating authority and as upheld by the appellate authority, there is no infirmity in the demand and confirmation of the same. We hold that the appellants' contention that if the exemption is conditional, the proviso to para 3 of the Notification 52/2003 is not attracted, is not acceptable as the language of the Notification is clear and in view of the ratio of the decision of Apex Court in the case of Dilip Kumar and Co. (supra), we find that there is neither a scope nor a need for any interpretation. The appellants have paid duty along with i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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