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2024 (12) TMI 233

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..... e treated as imports and are liable to duty in terms of proviso to Section 3A of the Central Excise Act, 1944. This is done specially to provide Level Playing Field to domestic manufacturers as the export Oriented Units are allowed to import their inputs and capital goods without payment of duty. From the clarifications/circulars CBIC letter dated 09.02.2007 issued from F. No DGEP/EOU/450/2006 dated 09 February, 2007, it is clear that the Revenue has specifically allowed EOU s to avail the benefit of notifications other than Notification No. 52/2003-Cus.. In these circumstances, the stance of commissionerate of Customs is contrary to that of the supervising office i.e. CBIC. Once CBIC allows this concession the field formations cannot deny it. The impugned order is set aside and appeal allowed. - HON'BLE MEMBER ( TECHNICAL ) , MR. RAJU And HON'BLE MEMBER ( JUDICIAL ) , MR. SOMESH ARORA Shri Arjun Raghavendra , Advocate , for the Appellant Shri Girish Nair , Assistant Commissioner ( AR ) for the Respondent ORDER RAJU Learned counsel for the appellant pointed out that the appellants are Export Oriented Unit. The appellant are entitled to availed Notification No. 52/2003-Cus .....

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..... 00% of their production as is evident from the words 100% EOUs. However, on account of certain hardship faced in getting export order, sales in DTA up to 25% were permitted from the year 1984 but there was a clear intention to distinguish between such sales by the 100% EOU from the sales by domestic units other than 100% EOU and it was for this purpose that proviso to Section 3(1) and Notification 125/84 was introduced. Since there were only two modes of clearance in which the 100% EOUs could have cleared the goods i.e. one by export and the other by domestic sale after obtaining the permission of the Development Commissioner, in respect of domestic sales the words allowed to be sold in India were incorporated in both the provisos. The fact however remains that 100% EOUs were never treated at par with other domestic units and for all practical purpose they were considered as units located outside India and accordingly Central Excise duty equal to amount of duties of customs leviable on like or similar goods manufactured outside India when imported into India was made applicable. In fact a different procedure was carved out and a separate Chapter VA was inserted in Central Excise Ru .....

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..... iable to pay duty on domestic clearances, others violating the law can conveniently escape duty liability and this would be against the principle of suppressing mischief and advancing remedy. 4. We have considered the rival submissions. We find that facts of the case are that appellant M/s. Galaxy Surfactant limited, a unit registered at Export Oriented Unit (EOU), sought to clear goods under Notification No. 50/2017 dated 30.06.2017 and Notification No. 46/2011-Cus., dated 01.03.11. In the ordinarily course of business, the appellants would avail benefit of Notification No. 52/2003-Cus., dated 31.03.2003 which is specifically designed for Export Oriented Unit (EOU). 4.1 Notification 52/2003-Cus., prescribes nil rate of duty for goods imported by Export Oriented Unit (EOU). The said exemption is subject to a large number of restrictions regarding use of the said goods for the purposes of production of goods for the purpose of export. There are also restrictions regarding what can be imported in as far as the goods required to be imported are to be certified by the jurisdictional authorities as needed for the manufacture of goods in the Export Oriented Units (EOU). There are restric .....

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..... ated 13.10.2004. 2. The matter has been examined. It is seen that parts, components and accessories of mobile handsets including cellular phones are exempted from basic customs duty, additional duty of customs under Section 3 (1) and Section 3 (5) of the Customs Tariff Act, 1975 under notification no. 21/2005-Cus dated 01.03.2005 and 39/2005-Cus dated 02.05.2005 with a condition that the importer has to follow the procedure set out in the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996. These parts, components and accessories of mobile handsets including cellular phones are also exempted from excise duty under notification no. 6/2006-C.E. dated 01.03.06 as amended with a condition for the manufacturer to follow the procedure set out in the Central Excise (Removal of Goods at Concessional rate of Duty for Manufacture of Excisable Goods) Rules, 2001. The DTA manufacturers of mobile phones are thus entitled to import/indigenously procure parts, components and accessories of mobile handsets including cellular phones free of duty under the aforesaid notifications whereas EOU units are being denied the benefit of these notifications. .....

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..... duty, on goods produced or manufactured in India at rates specified in the First and Second Schedule to the Central Excise Tariff Act, 1985. However, as per the proviso to the sakl subsection, goods produced or manufactured by Export Oriented Units [EOUs] units and cleared to domestic tariff area [DTA] are liable to excise duty equal to the aggregate of duties of customs leviable on like goods when imported into India. For such clearances from EOUs to DTA, Notification No. 22/2003-CE dated 31.03.2003 prescribes effective rates of excise duty on such DTA clearances under different circumstances. 2. In this context, proviso to sub-section (1) of section 5A of the Central Excise Act, 1944 states that unless specifically provided in a notification, no exemption therein shall apply to excisable goods which are produced or manufactured by an EOU and cleared to the DTA. 3. Further, EOUs are cligible for duty free import or domestic procurement of their inputs or raw materials under Notification No. 22/2003-CE dated 31.3.2003 and Notification No. 52/2003- Customs dated 31.03.2003. However, as per a proviso [the second proviso to para 6 in case of Notification No. 22/2003-CE and first prov .....

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