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TMI Blog2005 (4) TMI 239X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Customs Act, 1962 for the time being in force. A doubt has been raised whether the benefit of end use based notifications (for example notification No. 88/94-Customs) can be allowed or such clearance from the Export Oriented Unit (EOU)/Export Processing Zone EPZ) units to the eligible buyers. 2. The matter has been considered by the Board and I am directed to say that as per Export Oriented Unit (EOU)/Export Processing Zone (EPZ) Schemes the clearance from Export Oriented Unit (EOU)/Export Processing Zone (EPZ) Units to the Domestic Tariff Area (DTA) are placed on par with "imports". It is for this reason that the amount of duty payable thereon is linked to the customs duty normally leviable on like goods imported into India. Even the valuation has to be done with reference to the provisions of the customs law. 3. In this background, the benefit of end use based notifications are also applicable to clearances made from units in Export Oriented Unit (EOU)/Export Processing Zone (EPZ). The Assistant Collector or Customs/Central Excise incharge of these units would function as if they are Assistant Collectors of Customs in a customs station of import and apply the same prin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted Nations or an international organisation, a certificate from the United Nations or that International organisation that the said goods are intended for such use; (b) in case the said goods are - (i) supplied to an international organisation listed in the Annexure appended to this notification for use in a project that has been approved by the Government of India and financed (whether by a loan or a grant) by such an organisation, a certificate from such an organisation that the said goods are required for the execution of the said project and that the said project has duly been approved by the Government of India; or (ii) supplied to a project that has been approved by the Government of India and financed (whether by a loan or a grant) by an international organisation listed in the said Annexure, a certificate from an officer not below the rank of Deputy Secretary to the Government of India, in the Ministry of Finance (Department of Economic Affairs) that the said goods are required for the execution of the said project and that the said project has duly been approved by the Government of India (c) in case the said goods are intended to be supplied to a project ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise Duty, in terms of Notification No. 4/99-C.E. dated 11-2-1999. However, as per Section 5A of the Central Excise Act, 1944, unless specifically provided in the notification no exemption therein shall apply to excisable goods which are manufactured or produced in a 100% EOU and allowed to be sold in India. Whereas in the instant case, the Appellants have availed exemption under notification No. 108/95-C.E. dated 28-8-1995 as amended by Notification No. 4/99-C.E. dated 11-2-1999. This Notification does not provide such exemption therein to the excisable goods which are manufactured or produced in a 100% EOU. As this Notification does not provide exemption to supply of excisable goods produced or manufactured in a 100% EOU and 'allowed to be sold in India', the Appellants are liable to pay appropriate duties of excise applicable to 100% EOUs as per Section 3 of the Central Excise Act, 1944. 3. The appellants contention was that they had obtained permission from the Development Commissioner to clear the goods to the said projects vide their letter dated 11-4-02. It is their further submission that if the goods are cleared to DTA after obtaining permission from the Development Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he fact that the appellants were not truly entitled to the said exemption. He has taken a view that 100% EOU is barred from availing exemption under Notification No. 108/95-C.E. on account of proviso to Section 5A of C.E. Act. On this we have carefully considered the submission and find the order to be sustainable in so far as this view is concerned. Section 5A(1) of the C.E. Act lays down as follows "Section 5A - Power to grant exemption from duty of 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 whole or any part of the duty of excise leviable thereon : Provided that, unless specifically provided in such notification, no exemption therein shall apply to excisable goods which are produced or manufactured - (i) in a free trade zone or a special economic zone and brought to any other place in India; or (ii) by a hundred percent export-oriented undertaking and brought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roject implementing authority had originally issued the prescribed certification at a time when original suppliers were probably not 100% EOUs. 7. On our consideration, we find that reasoning given by the Commissioner is not sustainable. The Notification No. 108/95-C.E. does not exempt 100% EOU units as required under the proviso to Section 5A of CE Act. However, the rate of duty has to be charged at a concessional rate which is equal to 50% of such of the duties of customs. The Circular No. 7/01 dated 6-2-01 issued by the Board also clarifies this matter. It clearly clarifies that such of the duty leviable on the import of like goods should be worked out first and there after 50% of the amount of such duty was calculated, taken together should be collected as excise duty on such goods produced in EOUs/EPZ units when cleared into the DTA. As regards the revenue's plea that appellants cannot be treated as EOU, we find that Development Commissioner has already issued a certificate accepting the appellants to be a EOU unit. The Tribunal in the case of GINNI International Ltd. v. Commissioner of Central Excise, Jaipur - 2002 (139) E.L.T. 172 (Tri.-Del.) has held that once Development ..... X X X X Extracts X X X X X X X X Extracts X X X X
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