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TMI Blog2023 (10) TMI 1297X X X X Extracts X X X X X X X X Extracts X X X X ..... of duty leviable on a 100% EOU when clearing the goods to DTA. As per the said provisions, the duty of excise shall be levied and collected on any excisable goods, which are produced and manufactured by a 100% EOU and brought to any other place in India, shall be an amount equal to the aggregate of duties of customs which would be leviable under the Customs Act, 1962 or any other law for the time being in force, on like goods produced and manufactured outside India if imported into India and where the said duties of excise are chargeable with reference to their value, the value of such excisable goods shall, notwithstanding anything contained in any other provisions of this Act, be determined in accordance with the provisions of the Customs Act, 1962 and the Customs Tariff Act, 1975. Therefore, the duty payable in accordance with this Notification in respect of the said goods shall not be less than the duty of excise leviable on the like goods produced or manufactured outside EOU Unit, which is specified in the said Schedule read with the any other relevant Notification issued under Section 5A(1) of the Central Excise Act, 1944 - the appellant is entitled to pay the duty in term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng for exemption from payment of duty in excess of the amount equivalent to the aggregate of duty of customs leviable on like goods. Against (a) under Sl.No.2, it has been stated that duty of customs specified in the first schedule to the Customs Tariff Act, 1975 read with any other notification in force was reduced to 50%. Therefore, other notifications also may be considered for the purpose of calculating duty. Further, the aspect to be considered is that in view of the existence of effective rate of duty under Notification No.2/2008-CE dated 01.03.2008, the DTA units would be paying the duty @ 14% and at the same time EOU units cannot be asked to make payment of duty while manufacturing the goods out of raw-materials received from the domestic market at a higher rate. It is something impossible and hence, the relevant notifications in force are required to be considered while clearing the goods by 100% EOU to DTA. 3.1 Further, he submits that with reference to clearance of Spent Sulphuric Acid to the fertilizer companies, the appellant has also eligible for payment of nil rate of duty in terms of Notification No. 4/2006-CE dated 01.03.2006, as amended, the exemption would b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in conflict with the statutory provisions and hence, the exemption benefit cannot be extended. 3.7 It is also submitted that the said finding is not maintainable in view of the expressed statutory provisions, which has also been quoted by the Commissioner in his finding. The said provisions would clearly show that the guiding factory for computation of duty of the clearance of the goods by EOU under Section 3(1)(a)(ii) of the Central Excise Act, 1944 and in that view of the matter, the CVD would be payable at the prevailing rate, at which the manufactures of DTA would pay the duty and hence, the appellant would be eligible for the benefit of the said Notifications. 3.8 He relies on the decision of the Hon ble High Court of Himachal Pradesh in the case of Satya Metals Vs. Union of India reported in 2013 (290) ELT 514 (H.P.). 3.9 He further submits that for the subsequent period, the proceeding against the appellants has been dropped by the adjudicating authority vide order dated 17.03.2021. 3.10 The said order was affirmed by the ld.Commissioner (Appeals) vide its Order dated 07.10.2022 3.11 He, therefore, submits that the impugned proceedings are not sustainable. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of the Hon ble Supreme Court. The impugned order dated 17-3-2011, therefore, being contrary to the law laid down by the Hon ble Supreme Court is liable to be quashed. (c) Both sides have heavily referred to the provisions of Section 5A of the Act for projecting their case. The petitioners have all along been submitting that for calculating Additional Duty of Customs under Section 3(1) of the Customs Tariff Act, 1975, there is no bar to consider benefit of Notification No. 50/2003- C.E., whereas, contrary to this, the respondents have drawn the attention of this Court to the expression specifically provided appearing in the proviso to the Section 5A(1) of the Act and has submitted that Area based Central Excise Exemption notification does not specifically include 100% EOU unit. (d) On analyzing of Section 3 of the Act and which is the basic provision for levy and collection of the Central Excise duty on the goods, other than Special Economic Zones, produced or manufactured in India following aspects appear :- (i) Towards the goods manufactured or produced, other than 100% EOU, attract the rate of duty set forth the first schedule of the Central Excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on a like article if produced or manufactured in India. Therefore, it is only for the purpose of calculation of Additional Duty of Customs under Section 3(1) of the Customs Tariff Act, 1975 that one is required to look and consider as to what would be the quantum of excise duty which the goods might have discharged by the importer. 21 .. 22 . 23 . After analyzing the provisions of Section 3 of the Act , and Section 3(1) of the Customs Tariff Act, 1975, the next issue for dispute is as to what would be the effective rate of excise duty leviable on a like kind of goods, if produced in India. The whole debate here requires consideration of Section 3(1) of the Customs Tariff Act, 1975. It is undisputed that Notification No. 50/2003- C.E., dated 10-6-2003 for the State of Himachal Pradesh, like Notification No. 56/2002-C.E., dated 14-3-2002 for the State of Jammu Kashmir, both known as Area Based Exemption Notifications under Central Excise issued by the Central Government under the provisions of Section 5A of the Act . The claim of the petitioners that their unit squarely falls within the specified area of Notification No. 50 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Proviso to Section 5A(1) of the Act . Quite obviously any exclusive benefit of Central Excise exemption notification for a 100% EOU cannot be made applicable particularly when the duties have to be determined by way of aggregate duty of Customs leviable under the Customs Act, 1962. 25 . The DGEP in their Circular No. DGEP/ EOU /221/2007, dated 18-1-2008 and in circular of even no. dated 6-4-2009, while providing their clarifications in extending even benefit of area based exemption notification to 100% EOU in calculating the additional Customs duty under Section 3(1) of the Customs Tariff Act, 1975 (CVD), considered the provisions of Section 5A of the Act , Section 3(1) of the Customs Tariff Act, 1975, and thereby explained the scope of the expression SPECIFICALLY PROVIDED in Section 5A of the Central Excise Act, 1944. 26 . There is otherwise no bar in Area based exemption notification, referred above for 100% EOU for calculation the Additional Duty of Customs under Section 3(1) of the Customs Tariff Act, 1975. It is only by discharging the liability to pay the Additional Duty of Customs and which is equal to excise duty leviable on like goods when produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... established, as such, the applicability of such notification in question to the petitioners is also justifiable. The petitioners have drawn my attention to Section 5A(1A) of the Act to justify that where the effective rate of excise duty, for the units located in the specified areas of Himachal Pradesh manufacturing the goods other than the negative list is absolutely exempted, such rate is binding. The provisions of Section 5A(1A) does not allow the manufacturer complying with the conditions of the area based exemption notification and claiming thereto to opt out. There thus exist only one rate i.e. NIL rate of duty. In fact the circulars of DGEP and impugned order dated 17-3-2011 does not bar the applicability of Central Excise exemption notification for calculating Additional Duty of Customs under Section 3(1) of the Customs Tariff Act, 1975, as such, the impugned order dated 17-3-2011 is legally not sustainable. 28 . The order dated 17-3-2011 refers to there being two rates of duties under Section 3(1) of the Customs Tariff Act, 1975. The concept of two rate of duties under Section 3(1) of the Customs Tariff Act applies where the goods are not being produced in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an amount equal to the aggregate of duties of customs which would be leviable under the Customs Act, 1962 or any other law for the time being in force, on like goods produced and manufactured outside India if imported into India and where the said duties of excise are chargeable with reference toe their value, the value of such excisable goods shall, notwithstanding anything contained in any other provisions of this Act, be determined in accordance with the provisions of the Customs Act, 1962 and the Customs Tariff Act, 1975. 10. On this issue, the Notification No.23/2003-CE dated 31.03.2003 was issued, which states as under : In exercise of the powers conferred by sub-section (1) of Section 5A of the Central Excise Act, 1944, the Central Government exempts excisable goods produced or manufactured in an Export Oriented Undertaking Unit, and brought to any other place in India in accordance with the provisions of Export and Import Policy and subject to the relevant conditions specified in the Annexure to this Notification. 11. We find that at Sl.No.2 of the said Notification, it is specifically mentioned that in respect of all goods under any Chapter, the Central Gover ..... X X X X Extracts X X X X X X X X Extracts X X X X
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