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TMI Blog2022 (2) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... e excise duty paid on the finished goods at the time of clearance in DTA therefore, the customs duty which was forgone at the time of import stands paid in the form of excise duty on the finished goods. Once the duty free raw material got consumed in the manufacture of final product and the final product is cleared on payment of excise duty then demanding of customs duty on the raw material shall amount to double payment of duty. In the facts of the present case as the appellant have paid the full excise duty on the finished goods wherein, the raw material imported duty free has been consumed, no duty of customs can be demanded on such raw material - The issue has been considered in various judgments as cited by the appellant. In the case of COMMISSIONER OF C. EX. CUSTOMS VERSUS SURESH SYNTHETICS [ 2007 (8) TMI 33 - SUPREME COURT] it was held by the Apex Court that customs duty is not sustainable on the raw material when the finished goods have been cleared on payment of excise duty in DTA. Thus, it is settled that once in the 100% EOU the raw material imported duty free is used in the manufacture of final product and final product is cleared on payment of duty in DTA, for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant proposing recovery of customs duty of ₹ 10,09,276/- and 15,96,827/- on raw materials imported duty free in term of Notification No. 52/2003-Cus and also proposed confiscation of goods and imposition of penalty. The demand was confirmed by the adjudicating authority. Aggrieved, the appellant filed appeal before Commissioner (Appeals), who confirmed the demand on the ground that this is not a case of demand on raw material but a case of denial of exemption notification under which raw material was allowed to be imported duty free. The Case law cited by the appellant find no applicability, including the case of Suresh Synthetics 2007(2016) ELT 662(S.C.). Therefore, the appellant filed the present appeals. 2. Shri Rahul Gajera, Learned Counsel appearing on behalf of the appellant submits that Ld. Commissioner (Appeals) erred in not appreciating that inordinate delay in adjudication caused serious prejudice the Appellant s case and hence impugned order is not sustainable on this ground alone. In view of the Judgment of Hon ble Supreme Court in the case of Commissioner of C.Ex. Customs Vs. Suresh Synthetics 2007(216) E.LT. 662(S.C.) demand of Customs duty in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. We have carefully considered the submissions made by both the sides and perused the records. The revenue has confirmed the demand of customs duty on the raw material imported duty free in terms of Notifications No.52/2003-CUS dated 31.3.2003 on the ground that the appellant have cleared the goods in DTA without obtaining the permission of Development Commissioner therefore, the appellant failed to follow the procedure laid down under the Exim policy and failed to fulfil the condition of exemption notification No.52/2003-CUS dated 31.3.2003. There is no dispute in the fact that though the appellant have not obtained the permission from Development Commissioner for removal of goods in DTA but the appellant have paid full duty on the finished goods wherein, such imported raw material have been consumed. In case of 100% EOU, as per the policy, the appellant is required to clear the finished goods for export and if any part of the finished goods cleared in DTA, they are required to pay the excise duty equivalent to all customs duty. As per this policy in respect of DTA clearances, the customs duty which was forgone at the time of import of raw material gets subsumed in the excise dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show cause notice does not propose to demand customs duty on the fabrics the appellant imported on any ground such as that they were not utilised in the manufacture of exported goods. Such a demand could be justified where goods are manufactured by a 100% export oriented unit in a factory in a free trade zone using imported raw materials or components are cleared to a buyer in the domestic tariff area they are not imported. The 100% export oriented unit and a free trade zone are located in India. What is correctly payable is excise duty. The proviso under sub-section (1) of Section 3 of the Central Excise Act, 1944 provides that the duties of excise payable on such goods manufactured in a free trade zone or by export oriented unit shall be equal to the aggregate of the customs duties leviable under Section 12 of the Customs Act, 1962 on like goods imported into India. It also provides that where such duties are ad valorem the value shall be determined in accordance with the provision of the Customs Act, 1962 and Customs Tariff Act, 1975. The measure, therefore, in the statute for the calculation of duty is the customs duty payable on such goods if they were imported. The levy and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... If deemed exports are heid to be not included, then the quantum of clearances permitted in DTA will be accordingly reduced. This issue has been decided by the Tribunal in favour of the assessee on a number of precedent decisions nolding that the value of deemed export should be included while determining the FOB value of export, based on which DTA clearances are permitted. However, in this case, the assessee is not in appeal before us. The duty on finished goods stands demanded on the ground that the same is in excess of the permissible limit for the purpose of DTA clearance. The department's claim is to the effect that the raw material used in such finished products cleared in DTA should be treated as not used for the intended purposes and the duty on import should be demanded. We do not agree with this view In this case, it can not be said that the raw materials have not been used for the intended purpose. Even if there was clearances in excess of permissible limit it may amount to be case of diversion of finished goods, the duty shall be payable in respect of finished goods and no duty become demandable on the raw material used in the manufacture of such diverted goods. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f limitation, on this, the fact is that the appellant have cleared the goods in DTA on payment of full duty by following the procedure such as issuance of excise invoice wherein the duty payment has been shown, the same particulars were reflected in their monthly ER-2 return. In this fact when the department was in complete knowledge regarding the clearance of finished goods in DTA, they were not prevented from verifying the fact that whether the appellant have obtained the permission from Development Commissioner or not. However, the department has not raised any objection at the relevant time, it is only subsequently on scrutiny of ER-2 return were carried out. There is no change of circumstances at the time of clearance of goods, filing of ER2 return and the verification of the same at the later stage therefore, there is absolutely no suppression of fact or mis-declaration with intend to evade payment of duty on the part of the appellant. Therefore, we are of the clear view that extended period of demand cannot be invoked hence the demand for extended period is not sustainable on limitation also. 4.8 The issue of time bar related to 100% EOU has been considered in various jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ails of excise notification number and also serial number of the notification availed for DTA sales shown at Clause 4A of the Return would also enable the Central Excise officers receiving and assessing the Returns to check up whether the exemption availed of was in order or not. Therefore, the Revenue s contention that the details submitted in ER-2 Returns were not sufficient enough to find out whether the respondents exceeded the permissible limit of DTA clearance is not tenable in law. Further, the format of ER-2 Returns is prescribed by the Government and, therefore, an assessee cannot be accused of suppression of facts if the details and information were provided by him in accordance with the format of the Return unless he provides any wrong information in the Return which is not the case as set-up by the Revenue. 33 . Record reveals that the details in the prescribed format of ER-2 Returns along with the Central Excise invoices were submitted by the assessees on monthly basis for a period from 2004-05 onwards and, therefore, it is not believable that the Central Excise officers who received the Returns and invoices right from the year 2004-05 were not able to verify t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in DTA who have executed B-17 bonds before the department, the same logic would apply in respect of 100% EOUS as well. Therefore, the argument that merely because the respondent has executed a B-17 bond they would fall outside the purview of Section 11A is illogical and irrational. One cannot interpret the law in such a way so as to make the provisions of law redundant 6. In these circumstances, we find no merit in the appeal filed by the Revenue. Accordingly, we dismiss the same as devoid of merits The aforesaid decision of the tribunal was taken to the Hon ble Bombay High Court by the revenue, the Bombay High Court in a judgment reported at COMMISSIONER OF C. EX.., PUNE-I Vs. EMCURE PHARMACEUTICALS LTD.- 2016 (342) E.L.T. 172 (BOM) held as under : 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 Upon a reading of the Tribunal's order, we are unable to agree. The Tribunal found and as a matter of prompt action. The Department though in the know of things on 14-6-2004, allowed the assesses to avai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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