Customs, Excise and Gold Tribunal - Delhi
Sam Spintex Ltd. And Sh. Arvind A. ... vs Commissioner Of Central Excise on 29 October, 2003
Equivalent citations: 2004(163)ELT212(TRI-DEL)
ORDER P.S. Bajaj, Member (J)
1. The above captioned appeals have been filed by the appellants against the common order-in-original dated 27.2.2002/26/3/2002 vide which the Commissioner has confirmed the duty with penalty on company appellant No. 1 and also imposed penalty on its Director, appellant No. 2. The facts are not much in dispute.
2. The appellant No. 1 company is a 100% Export Oriented Unit engaged in the manufacture of cotton grey knitted fabrics falling under Sub-heading 6002.92 of the CETA. Apart from exporting the fabrics out of India, they had also cleared certain quantity of fabrics in the DTA during the period May to October 99 without the permission of the Development Commissioner and as such they were served with the show cause notice for payment of duty in terms of proviso to Section 3(1) of the Central Excise Act. The adjudicating authority had accordingly confirmed the duty demand with penalty not only against the appellant company No. 1 but also imposed penalty on its Director, appellant No. 2.
3. The sole issue involved in the present case is as to whether the appellant company having cleared the goods in the DTA without permission of the Development Commissioner, are liable to pay duty under the main Section 3(1) of the Act or under its proviso. The Larger Bench of the Tribunal in M/s. Himalaya International Ltd. v. CCE, Chandigarh ( 2003-Taxindiaonline-155-CESTAT-DEL ) has taken the view that where clearances by 100% EOU had been made in DTA without permission of the competent authority, the assessee is liable to pay duty under the proviso to Section 3(1) of the Act. But the learned Counsel has brought to our notice the judgment of the Tribunal rendered by the Division Bench in Commissioner of Central Excise, Jaipur II v. Pratap Singh wherein it has been observed that in a case of v. clandestine removal of the goods by 100% EOU, in the DTA without permission of the competent authority, the duty payable would be under the main Section 3(1) of the Central Excise Act. This judgment of the Tribunal was never brought to the notice of the Larger Bench. Besides this, this judgment has been affirmed by the Apex Court vide its order reported in 2003 (156) ELT A382. That being so, the judgment of the Tribunal passed in that case has merged in that of the Apex Court and has to be given preference over the Larger Bench judgment. Under these circumstances, we have no option but to hold that the duty payable by the company appellant No. 1 would be under the main Section 3(1) and not under the proviso appended to that Section. The impugned order being contrary to this, for having confirmed the duty under proviso to Section 3(1) of the Act cannot be sustained and deserves to be set aside.
4. Consequently, the impugned order of the adjudicating authority is set aside. The appeals of the appellants are allowed in to with consequential relief, if any, permissible under the law.