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TMI Blog2022 (11) TMI 336X X X X Extracts X X X X X X X X Extracts X X X X ..... incorrect in law. In any case, these semi-finished goods/ work in process will reach to the stage of final product and the same is liable for duty at the time of clearance from the factory. Therefore, at the intermediate stage when the goods are not fully manufactured, the excise duty was not payable at the time of debonding, particularly when the goods were not cleared from the factory and were in the process of manufacturing. No duty can be demanded on semi-finished goods/ work in process, lying at the time of debonding of 100% EOU - Appeal allowed - decided in favor of appellant. - EXCISE APPEAL NO. 10104 OF 2013 - Final Order No.A/11345/2022 - Dated:- 4-11-2022 - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. RAJU, MEMBER (TECHNICAL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds and the duty is required to be paid on the value of semi-finished goods under Section 3(1) of Central Excise Act. The appellant vide letter dated 14.06.2010 informed the department the various stages in process of goods and submitted that they are not in fully finished form and not in marketable condition and therefore duty cannot be demanded on work in process. The department not accepting the contention of the appellant had issued the show cause notice alleging that the duty on work in process / semi-finished goods is required to be paid equal to aggregate duty of customs on combined value of raw material i.e. indigenous imported raw material contained in finished goods including the cost of manufacturing of semi-finished goods and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T-Mum.) Ambalal Sarabhai Enterprises 1989 (43) ELT 214 (SC) Gujarat Narmada Valley Fert. Co. Ltd. 2005 (184) ELT 128 (SC) 2.2 He alternatively submits that duty is paid on the removal of goods. In the present case, the goods was lying in factory and the same was not removed thereby duty should not be demanded. In this support, he placed reliance on the following judgements: Lupin Ltd. 2019 (2) TMI 937 CESTAT New Delhi EID Parry India Limited 2018 (8) TMI 1494- CESTAT Chennai 2.3 He submits that the demand was raised heavily relying on the CBEC Customs Manual Instructions. It is his submission that the demand cannot be made by relying on the CBEC Customs Manual. In the manual, it was clarified that semi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 483 (Tri. Bang.). 2.4 He submits that even if duty is payable, the entire exercise is of Revenue neutral for the reason that if any duty is paid on the intermediate stage, the same is available for cenvat credit and can be utilized for payment of duty when the finished goods is cleared from the factory. He takes support in this regard from the following judgements: Indeous Abs Ltd. 2010 (254) ELT 0628 (Guj. HC) Coca Cola India Pvt Ltd. 2007 (213) ELT 490 (SC) SRF Ltd. 2007 (220) ELT 201 (T) United Phosphorus Ltd. 2007 (210) ELT 45 (Tri. Amd.) Indian Oil Corp. Ltd. 2010 (262) ELT 751 (SC) 2.5 He submits that in case of Stanadyne Amalgamations Pvt. Ltd. 2019 (29) GSTL 605, it was held by Hon ble Madras ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticularly when the goods were not cleared from the factory and were in the process of manufacturing. This issue is no longer res integra as the same stand decided by CESTAT Bangalore in the case of Tirumala Seung Han Textiles Ltd. (supra) Wherein the following order was passed. 5.1 In respect of in-process goods, the appellants have argued that there is no authority for demanding duty. As per Para 6.18 of the Foreign Trade Policy 2004-09, an EOU may opt out of the scheme with the approval of the Development Commissioner subject to the payment of Excise Duty. In the policy, only imported and indigenous capital goods, raw materials, components, consumables, spares and finished goods in stock are mentioned. There is no mention about the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Limited (supra), this Tribunal taken the same view wherein the following order was passed. 5. We find that the ratio laid down by the Tribunal in Tirumala Seung Han Textiles Ltd. (supra) relied upon by the lower appellate authority and by the Learned Advocate will apply on all fours to the appeal on hand. The relevant portion of that decision is reproduced as under:- 5.1 In respect of in-process goods, the appellants have argued that there is no authority for demanding duty. As per Para 6.18 of the Foreign Trade Policy 2004-09, an EOU may opt out of the scheme with the approval of the Development Commissioner subject to the payment of Excise Duty In the policy, only imported and indigenous capital goods, raw materials, components, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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