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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 ..... 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 Notification 8/97-C.E., dated 1-3-1997 wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 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 the 1978 Act, respectively and, therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oduced 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 of this Act, be determined in accordance with the provisions of the Customs Act, 1962 (52 of 1962) and the Customs Tariff Act, 1975 (51 of 1975). Explanation 1. Where in respect of any such like goods, any duty- of customs leviable under the said Section 12 is leviable at different rates, such duty shall, for the purposes of this proviso, be deeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the said Section 12 is leviable at different rates, then, such duty shall for the purposes of this proviso, be deemed to be leviable under the said Section 12 at the highest of those rates. Explanation 2. -In this proviso, - xx xx xx xx xx xx xx xx xx (ii) "hundred per cent export-oriented undertaking" means an undertaking which has been approved as a hundred per cent export-oriented undertaking by the Board appointed in this behalf by the Central Government in exercise of the powers conferred by Section 14 of the Industries (Development and Regulation) Act, 1951 (65 of 1951), and the rules made under that Act. xx xx xx xx xx xx xx xx xx Power to grant exemption from duty ofSection 5A. excise.- (1) If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by notification in the Official Gazette, exempt generally either absolutely or subject to such conditions (to be fulfilled before or after removal) as may be specified in the notification, excisable goods of any specified description from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced or manufactured by domestic units. For the purpose of giving effect to these notifications, the Board issued Circular No. 384/17/98-CX, dated 20-3-1998 clarifying that notification dated 25-7-1991 exempts excisable goods produced or manufactured in EOU from whole of AED leviable under Section 3 of the 1978 Act, and the assessee claiming benefit of notification dated 1-3-1997 will also by eligible to claim benefit under notification dated 25-7-1991. 7.For the sake of convenience, notifications dated 25-7-1991 and 1-3-1997 (unamended and amended) and circulars dated 20-3-1978 and 19-10-2000 are reproduced below :- "Notification dated 25-7-1991 : In exercise of the powers conferred by sub-section (1) of Section 5A of the Central Excises and Salt Act, 1944 (1 of 1944), read with sub-section (3) of Section 3 of the Additional Duties of Excise (Textiles 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the time being in force on like goods, produced or manufactured in India other than in a hundred per cent export-oriented undertaking or a free trade zone, if sold in India : Provided that nothing contained in this notification 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 payment of additional duties of excise leviable under Section 3 of the Addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 into the DTA would be restricted to the "aggregate of the duties of excise leviable under the said Section 3 of the Central Excise Act or under any other law for the time being in force, on like goods produced or manufactured in India other than in a hundred per cent export-oriented undertaking or a free trade zone." "In other words, such yarns produced and cleared from 100% EOU to DTA a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 leviable on all excisable goods produced or manufactured in India including those manufactured by 100% EOUs, but with a view to encourage exports, the goods manufactured by 100% EOUs have been granted exemptions from payment of BED and AED. Notification 55/91-C.E., dated 25-7-1991 is directly relatable to the goods manufactured by 100% EOUs and exported out of India and Notific ..... X X X X Extracts X X X X X X X X Extracts X X X X
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