Custom, Excise & Service Tax Tribunal
Dr. Reddy'S Laboratories Ltd vs Commissioner Of Central ... on 6 December, 2013
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Final Order No . 27102 / 2013 Appeal(s) Involved: E/2049/2012-SM [Arising out of Order-in-Appeal 27/2012(V-I)CE dated 22/05/2012 passed by the Commissioner of Customs Central Excise & Service Tax (Appeals), Visakhapatnam] DR. REDDY'S LABORATORIES LTD (100%EOU), PYDIBHIMAVARAM VILLAGE, RANASTHALAM MANDAL, SRIKAKULAM DIST 532409. Appellant(s) Versus Commissioner of Central Excise,Customs and Service Tax - VISAKHAPATNAM-I CENTRAL EXCISE BUILDING PORT AREA VISAKHAPATNAM ANDHRA PRADESH-530035 Respondent(s)
Appearance:
Mr. B. Seshagirirao, Adv For the Appellant Ms. Sabrina Cano, A.R. For the Respondent CORAM:
HONBLE SHRI B.S.V. MURTHY TECHNICAL MEMBER Date of Hearing: 06/12/2013 Date of Decision: 06/12/2013 The question involved in this appeal is when an EOU gets converted into DTA is it required to pay central excise duty on the stock of finished goods and semi-finished goods lying in the factory at the time of de-bonding. The department required the appellant to pay the duty and the appellant paid the duty under protest so that conversion process does not get held up. Subsequently a speaking order was passed by the original adjudicating authority in which the original authority held that the appellant is liable to pay tax on the finished goods and semi-finished goods at the time of de-bonding. He relied upon Appendix 14-I-L of Foreign Trade Policy & Handbook of Procedures (2009-14). The Commissioner (Appeals) on an appeal filed by the appellant decided against the appellant and he relied upon the CBEC Circular No. 8/2004-Customs dated 28.1.2004, wherein the board has clarified that all duties on the capital goods, raw material and finished goods lying in stock should be collected at the time of giving permission for conversion of an 100% EOU into DTA.
2. The learned counsel submitted that the appellant is in any case liable to pay central excise duty on the finished and semi-finished goods at the time of their removal out of the factory. If appellant is to pay duty on these items before conversion into DTA, the appellant would be required to pay duty twice on the same goods. Further he also relies upon the decision in the case of Commissioner of Customs & Central Excise, Vadodara Vs. Solitaire Machine Tools (P) Ltd. [2003 (152)ELT 384(Tri-Mum)].
3. The learned A.R. would reiterate the stand taken by the lower authorities.
4. I have considered the submissions made by both sides. I find that the Tribunal in paragraph 8 of the decision in the case of Solitaire Machine Tools (P) Ltd.(supra), observed as follows:
8.The second? point raised in the appeal is that manufactured goods in stock should have been subjected to duty at the time of debonding. On this issue, the submission of the assessee is that duty liability of these goods would arise and is to be discharged at the time of their removal out of the factory and not prior to that. They maintain that once the unit is debonded, duty liability will arise on the manufactured goods in stock as in the case of any other goods manufactured in India. We find that the revenue's demand for payment of duty on the manufactured goods in stock at the time of debonding of the EOU is not sustainable. Upon debonding an EOU become a manufacturing unit in the domestic tariff area. The goods produced by that unit becomes liable to assess the central excise duty like any other goods manufactured in the domestic tariff area. Same is the position in respect of goods lying in stock at the time of debonding, because those goods are become goods lying in stock with a unit in domestic tariff area. The question of payment of duty on such goods arises only at the point of removal of those goods from the place of manufacture. Demand of duty at the lime of debonding is clearly pre-mature. Since the Tribunal has taken a decision on merits and has taken a view that the duty need not be paid on the finished goods and work in process, I am bound to follow this decision in the absence of any contrary decision of the Tribunal or a superior judicial forum produced before me. Accordingly, following the precedent Tribunal decision, the appeal filed by the appellant is allowed with consequential relief if any to the appellant.
(Order dictated and pronounced in open court) B.S.V. MURTHY TECHNICAL MEMBER Pnr....
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