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TMI Blog2001 (7) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... rules made therein and/or for payment of AED on yarn cleared in DTA. 2.The petitioners are registered as 100% EOU engaged in the manufacture of cotton yarns out of indigenous raw material attracting BED leviable under Section 3 of the 1944 Act and AED leviable under Section 3 of the 1978 Act. They have been availing the exemptions granted by the Central Government from time to time under Section 5A(1) of the 1944 Act. Their grievance is that by issuing the impugned circular, the Board has attempted to deprive them of the benefit of exemptions available under Notification 8/97-C.E., dated 1-3-1997 read with Notification 55/91-C.E., dated 25-7-1991. The petitioners have challenged circular dated 9-10-2000 by contending that it is ultra vires to the provisions of the 1944 and 1978 Acts and exemption notifications dated 25-7-1991 and 1-3-1997. They have averred that Notification No. 55/91-C.E., dated 25-7-1991 was in respect of goods exported by EOU and not in respect of clearance of goods in DTA which was covered by Notification No. 8/97-C.E., dated 1-3-1997 (unamended). They have averred that after the amendment made vide notification dated 1-3-2000, the exemption contemplated by No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bout rampant changes by virtue of which additional duty of excise was also levied on 100% EOU in respect of clearances made in DTA." 3.Shri Balbir Singh and Shri Somesh Ojha argued that the objection raised on behalf of the respondents to the maintainability of the writ petitions on the ground they are being premature and also on the ground that the petitioners can avail alternative remedies after passing of the adverse orders should be rejected because they have challenged the authority of the Board to issue the impugned circular and have also questioned its vires. Learned Counsel submitted that the appellate and other adjudicating authorities appointed under the 1944 Act cannot go into the legality of the circular issued by the Board and, therefore, the remedies of appeal, etc., cannot be treated as effective alternative remedies. In support of this argument, learned counsel relied on the decisions in A.V. Vekateswaran, Collector of Customs, Bombay v. Ram Chand Sobh Raj, 1983 (13) E.L.T. 1327 and Goodyear India Ltd. v. Union of India, 1990 (49) E.L.T. 39. On merits, the learned Counsel argued that BED and AED are two different types of duties chargeable under the 1944 Act and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all excisable goods (which are produced or manufactured in India) as, and at the rates, set forth in the Schedule to the Central Excise Tariff Act, 1985 : Provided that the duties of excise which shall be levied and collected on any excisable goods which are produced or manufactured :- xx xx xx xx xx xx xx xx xx by a hundred per cent export-oriented(ii) undertaking and allowed to be sold in India, shall be an amount equal to the aggregate of the duties of customs which would be leviable under Section 12 of the Customs Act, 1962 (Act No. 52 of 1962), on like goods produced or manufactured outside India if imported into India, and where the said duties of Customs are excisable by reference to their value; the value of such excisable goods shall, notwithstanding anything contained in any other provision o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Central Excise Tariff Act, 1985 (5 of 1986) which are produced or manufactured in India, as, and at the rates, set forth in the said Second Schedule. Provided that the duties of excise which shall be levied and collected on any excisable goods which are produced or manufactured, - xx xx xx xx xx xx xx xx xx (ii) by a hundred per cent export-oriented undertaking and allowed to be sold in India, shall be an amount equal to the aggregate of the duties of customs which would be leviable under Section 12 of the Customs Act, 1962 (52 of 1962) or any other law for the time being in force, on like goods produced or manufactured outside India if imported into India, and where the said excisable goods shall, notwithstanding anything contained in any other provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xx xx xx xx xx xx xx by a hundred per cent export-oriented(ii) undertaking and allowed to be sold in India. Explanation. -In this proviso, "free trade zone" and "hundred per cent export-oriented undertaking" shall have the same meanings as in Explanation 2 to sub-section (1) of Section 3. (2) If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by special order in each case, exempt from payment of duty for reasons to be stated in such order, any excisable goods of strategic or secret nature, or for charitable purpose, on which duty is leviable. An exemption under sub-section (1) or(3) sub-section (2) in respect of any excisable goods from any part of the duty of excise leviable thereon (the duty of excise leviable thereon being hereinafter referred to as the statutory duty) may be granted by providing for the levy of a dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les and Textile Articles) Act, 1978 (40 of 1978), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts all excisable goods produced or manufactured in a hundred per cent Export Oriented Undertaking from the whole of the duty of excise leviable thereon under the second mentioned Act. xx xx xx xx xx xx xx xx xx Notification dated 1-3-1997 : (unamended) In exercise of the powers conferred by sub-section (1) of Section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the finished products, rejects and waste or scrap specified in the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) and produced or manufactured in a hundred per cent exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n shall apply where such finished products, if manufactured and cleared by a unit other than a hundred per cent export-oriented undertaking or a unit in a free trade zone, are wholly exempt from the duties of excise or are chargeable to Nil rate of duty. xx xx xx xx xx xx xx xx xx Circular No. 384/17/98-CX, dated 20-3-1998 : Government of India Ministry of Finance (Department of Revenue) New Delhi Subject : Central Excise - Whether Additional Duties of Excise are leviable under 100% EOU is claiming exemption under Notification No. 8/97-C.E., dated 1-3-1997 - Clarification regarding. I am directed to say that representations have been received by the Board to the effect that if the EOU is claiming exemption under Notification 8/97-C.E., dated 1-3-1997, the Central Excise Authorities are insisting on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal duty under the above mentioned Act on goods manufactured and cleared into DTA though there is specific exemption for such goods vide Notification No. 55/91-C.E., dated 25-7-1991 and hence no Additional Duty will be attracted. The matter has been examined. It is observed that2. as per proviso to Section 3(1) of the Central Excise Act, 1944, goods produced in a 100% EOU and allowed to be sold in India are liable to excise duty which is equal to the aggregate of duties of customs leviable on like goods when imported into India. On import of textile yarns, apart from Basic Customs duty, goods will also be subject to Additional duty of Customs (countervailing duty) which will be equivalent to total duties leviable as duty of excise on like goods produced in the country. (This CV duty will thus include basic Central Excise Duty under Central Excise Act + Additional Duty of Excise under T & TA Act). Notification No. 8/97-C.E., dated 1-3-1997, as3 amended by Notification No. 11/2000-C.E., dated 1-3-2000, provides, that the excise duty payable by a 100% EOU under Central Excise Act in respect of the finished goods manufactured exclusively from indigenous raw materials and cleared int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said Act. If the Court upholds their plea, then the action for recovery of AED in respect of clearances made in DTA cannot be taken against the petitioners. Therefore, the writ petitions cannot be termed as premature. As regards the plea of alternative remedies, it is sufficient to observe that neither the appellate authority nor any other adjudicating authority appointed under the 1944 Act can grant a declaration that the circular issued by the Board is ultra vires to the provisions of the 1944 Act or the exemption notifications issued under Section 5A(1) thereof. In view of this, the petitioners cannot be non-suited on the ground that after passing of the adverse orders, they can avail remedies of appeal, etc. 9.Having disposed of the preliminary objection raised by the respondents, we shall now deal with the main issue as to whether the impugned circular is ultra vires to the powers of the Board and exemption notifications issued under Section 5A(1) of the 1944 Act. A careful reading of the provisions of Sections 3 and 5A(1) of the 1944 Act along with notifications 55/91-C.E. and 8/97-C.E. shows that duties specified in the Schedule of the Central Excise Tariff Act, 1985 are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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