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TMI Blog2024 (11) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... r demand of duty by invoking extended period is not legally sustainable. We find that in the case of Commissioner of Central Excise, Mumbai Vs. Blue Star Ltd. [ 2015 (3) TMI 628 - SUPREME COURT ] have held that extended period is not invokable in the case of goods cleared through CT-3 procedure by 100% EOU unit. As demand confirmed under the extended period is not sustainable. Further, we find it is not even be possible for sustaining the demand of duty for the normal period, as in the present case, the SCN have not been issued within the permitted period one year from the relevant date for covering the normal period of demand. Since the inputs have been cleared as such from the 100% EOU unit to DTA, in terms of Section 3 ibid, applicable duties of central excise are required to be paid on such goods. As the appellants had discharged such duty payable on these goods, by debiting from their CENVAT credit account, which is also available for taking further CENVAT credit by the buyer, no further duty payment is required to be made through PLA/cash. Since the adjudged demands are liable to be set aside on the ground of non- sustainability of extended period of limitation, and that norm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. The Department had objected for such utilization of the CENVAT credit on the ground that it is in violation of the legal provisions under Rule 3(4) of CCR and that there is no provision for utilizing CENVAT credit for payment of customs duty, and brought the same to the notice of the appellant vide letter No. C. Ex./PTL- III/Misc/CIPLA/Ras/08-09/205 dated 05.05.2009 and sought certain details for taking further action by them. The appellants had informed the Department that they had deposited duty of Rs.26,43,567/- and interest of Rs.1,47,677/- in cash vide GAR-7 challans dated 05.06.2009 with respect to removal of the imported inputs as such to DTA; and with respect to indigenously procured inputs duty free, cleared as such into DTA, they are paying the duty through CENVAT credit account. Since, the appellants are not entitled for utilization of the CENVAT credit towards payment of duty in terms of Rule 3(4) of CCR and such clearances were effected by the appellants without the knowledge of the Department, show cause proceedings were initiated by the Department in issue of Show Cause Notice (SCN) dated 30.08.2012 proposing for demand of duty of Rs.21,80,828/- along with intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore he claimed that confirmation of the adjudged demands by invoking the extended period is not legally sustainable. 4. Learned Authorised Representative (AR) reiterated the findings made by the Commissioner (Appeals) in the impugned order and submitted that in view of the specific provisions for utilization of CENVAT credit provided under Rules 3(4) of the CCR, the debit of CENVAT credit account for payment of duty on inputs procured through CT-3 certificates at the time of its clearance as such, is not permissible. Accordingly, he submitted that the impugned order is sustainable in law and prayed for rejection of the appeal filed by the appellants. 5. We have heard both sides and perused the records of the case. We also gone through the additional submissions made in the form of paper books by both the sides. 6. The short issues for consideration before the Tribunal in this case are,- (i) whether the CENVAT credit can be utilized for payment of duty, in respect of inputs procured duty free, when the same are cleared as such, by a 100% EOU into DTA or utilization of CENVAT credit is not permissible in such situation, in terms of Rule 3(4) of CENVAT Credit Rules, 2004 read with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctured outside India if imported into India, and where the said duties of customs are chargeable by reference to their value, the value of such excisable goods shall, notwithstanding anything contained in any other provision of this Act, be determined in accordance with the provisions of the Customs Act, 1962 and the Customs Tariff Act, 1975 (51 of 1975) .. Central Excise Rules, 2002 Rule 17. Removal of goods by a Hundred per cent. RULE Export- Oriented Undertaking for Domestic Tariff Area. Where any goods are removed from a hundred (1) per cent. export-oriented undertaking to domestic tariff area, such removal shall be made under an invoice by following the procedure specified in rule 11, and the duty leviable on such goods shall be paid by utilizing the CENVAT credit or by crediting the duty payable to the account of the Central Government in the manner specified in rule 8 8. 1 On plain reading of the above legal provisions, it transpires clearance of goods into India/DTA by a 100% EOU is subject to payment of central excise duty under Section 3 of the Central Excise Act, 1944. Thus, the procedure relating to removal of the goods from 100% EOU have been prescribed in Rule 17 of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... permission letters granted by the Department to the appellants, we find that these cover the entire period of dispute, from June, 2008 to April, 2009. In view of the above evidences, where the jurisdictional central excise authorities are not only aware of the clearances of inputs as such being made by the appellants, but have given specific permission for such removal, then it cannot be stated that the Department is unaware of such clearances and therefore any SCN issued for demand of duty by invoking extended period is not legally sustainable. 8.3 In this regard, we find that the Hon ble Supreme Court in the case of Commissioner of Central Excise, Mumbai Vs. Blue Star Ltd. 2015 (318) E,L.T. 11 (S.C.) have held that extended period is not invokable in the case of goods cleared through CT-3 procedure by 100% EOU unit. The relevant paragraphs of the said judgement is extracted and given below: 5. The respondent took the matter in appeal before the Customs, Excise Gold (Control) Appellate Tribunal (hereinafter referred to as CEGAT ). The CEGAT affirmed the order on merit but has accepted the contention of the respondent insofar as issue of limitation is concerned and allowed the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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