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TMI Blog2003 (4) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... Chapter 39 of the First Schedule to the Central Excise Tariff Act, 1985 and sells such finished products, inter alia, in the Domestic Tariff Area, which is commonly known as DTA Sale in terms of the provisions of paras 9.9 and 9.10 of Chapter 9 of the Export and Import Policy, 1997-2002. 4.The petitioners allege that according to Export and Import Policy, 1997-2002 as well as that of 2002-2007, a manufacturer under the Export Processing Zone Scheme need not physically export his finished product for fulfilment of his export performance. According to such policy, the manufacturer can sell the finished product in the Domestic Tariff Area against payment in Foreign Exchange and such sale would be counted towards fulfilment of his export performance. According to the petitioners, the manufacturer is also permitted to sell a certain percentage of DTA in foreign exchange in Domestic Tariff Area subject to payment of applicable duties. 5.There is no dispute that Government of India has approved the proposal of the petitioner no. 1 for setting up of a new unit in Falta Export Processing Zone for processing plastic scrap for manufacture and export of plastic granules on the terms and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made further amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 3/2001-Central Excise, dated 1st March, 2001 by inserting an explanation at the end of serial No. 73 in the entry in column (3). According to such explanation, it was clarified that nothing contained in those exemptions should apply to plastic materials reprocessed in a free trade zone and special economic zone or a hundred per cent export-oriented undertaking and brought to any other place in India. 10.The writ petitioners contend that so far as the countervailing duty under section 3 of the Customs Tariff Act, 1975 is concerned, no such additional duty of customs is payable by the petitioners in view of the notifications bearing No. 5/98-C.E., 5/99-C.E. and 6/2000-C.E., dated 2nd June, 1998, 28th February, 1999 and 1st March, 2000 respectively. According to the petitioners, under the aforesaid three notifications plastic granules which are materials falling under Chapters 39.01 to 39.14 of the Central Excise Tariff Act, 1985 and reprocessed in India out of scraps and wastes falling under Chapter 39 of the said Tariff Act are exempted from payment of excis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondents has contended that the units in the free processing zone are supposed to export their entire production and for the above purpose they enjoy the benefit of duty free import procurement which are not available to other non-export oriented unit. According to Mr. Banerjee under the notification dated 10th October, 2001 it has been clarified that the benefit of exemption is not available to the units in the free processing zone. Mr. Banerjee contends that the earlier decision of Pinaki Chandra Ghosh, J. on the writ application filed by the petitioner and those of the Division Bench of Gujarat High Court and Delhi High Court are not relevant for the purpose of deciding this application in view of the fact that in those decisions, the circular dated 10th October, 2001 was not considered. Apart from the aforesaid fact, Mr. Banerjee contends that in those three decisions the Supreme Court decision in the case of Hyderabad Industries Limited vs. Union of India (supra) was taken as an authority for the proposition that countervailing duty is not applicable to a case of this nature. Mr. Banerjee contends that the aforesaid decision of Supreme Court had no relevancy in decidin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appellants was that the asbestos fibre which was imported had not been manufactured or produced, and under Section 3(1) of the Customs Tariff Act, additional duty of customs could be levied only if the article which is imported is one which is produced and manufactured in India and is liable to payment of excise duty. In other words, the submission was that the asbestos fibre had not undergone any manufacturing or other process and, therefore, no additional duty could be charged. 17.The High Court dismissed the writ application by accepting the contention of the respondent that extracting or removing asbestos fibre from the rock amounted to manufacturing process being undertaken and, therefore, excise duty was leviable and, as a result thereof, additional duty under section 3(1) of the Tariff Act could be imposed on the import of the asbestos fibre into India. 18.Against those decisions, applications were preferred by special leave which were heard by a Bench of Three Judges. After examining the materials relied upon by High Court the said Bench ultimately held that asbestos that is so removed from parent rock is in every respect asbestos that was embedded in it. Accordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the extent it took a contrary view and was therefore held to be incorrect proposition of law. 20.Secondly, the Larger Bench held that on asbestos fibre imported into India the appellants were not liable to pay any duty under Section 3(1) of Customs Tariff Act. 21.In the case before us the question is whether a unit reprocessing goods in Export Processing Zone is liable to pay countervailing duty under Section 3(1) of the Customs Tariff Act when similar articles reprocessed in non-export processing zone is not required to pay any excise duty. In my view, the Supreme Court decision in the aforesaid case of Hyderabad Industries Limited thus has no bearing for the purpose of deciding the dispute in question and it is rightly contended by Mr. Banerjee that the aforesaid decision of Supreme Court cannot be relied upon for the purpose of deciding the question involved herein where "reprocessing" of plastic materials at the unit is admitted. 22.The three other decisions viz. the decision of Pinaki Chandra Ghosh, J. in the earlier writ application and the division bench decisions in the case of Gujarat High Court and in the case of Delhi High Court referred to earlier had no occasion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entioned in the impugned notification, at the same time in no way, violates any of the provisions of the other situates. It is rightly pointed out by Mr. Banerjee that Section 5A of the Central Excise Act specifically provides that unless specifically mentioned in any notification no exemption should apply to excisable goods which are produced or manufactured in a free trade zone and brought to any other place in India. Articles manufactured in a free trade zone cannot be classified in the same category with those produced and manufactured in a non-free trade zone. 25.As pointed out by the Supreme Court in the case of Hyderabad Industries Limited (supra), Section 3(1) of the Customs Tariff Act is the charging section for countervailing duty and additional duty levied under Section 3(1) of the said Act is independent of customs duty which is levied under Section 12 of Customs Act. Such duty can be charged only if an article has undergone production or manufacture. In the instant case, the imported plastic granules/agglomerates have undergone manufacture and such manufacturing process has been done in the free trade zone. According to Section 3 of the Customs Tariff Act, 1975 any a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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