Customs, Excise and Gold Tribunal - Tamil Nadu
Commissioner Of Customs vs Regency Ceramics Ltd. on 20 June, 2000
Equivalent citations: 2000(121)ELT384(TRI-CHENNAI)
ORDER V.K. Ashtana, Member (T)
1. The simple dispute in this Revenue appeal is the date on which the respondent would go out of the purview of a 100% Export Oriented Unit (EOU) and into a totally Domestic Tariff Area unit. While Revenue contends that this date would be from 7-1-1987 the date on which the first clearance of goods manufactured by the respondents has been made into the domestic tariff area, in terms of Govt. of India, Ministry of Industry, Secretariat for Industrial Approvals F. No. E.O. 219(83)-COM/ MUCC, dated 1-1-1987 addressed to the respondent, the respondent submits that they were enjoying the status of 100% EOU even upto 1-1-1994. Therefore, the further dispute is whether the date of debonding and hence payment of various duties of conversion to a domestic unit would attract rates of duty under the Customs Tariff Act and the Central Excise Tariff as prevalent on 7-1-1987 or on 1-1-1994. It so happens that the rate prevalent on 1-1-1994 are lower. Also the question of allowing prescribed depreciation is involved, as if the unit is held to be converting from 100% EOU to DTA unit only on 1-1-1994, then the period upto 1-1-1994 shall be considered for computing the depreciation available.
2. Heard ld. Advocate Shri Murugappan assisted by Ms. Prameela Viswanathan, Adv. and Shri S. Sudarsan, ld. DR.
3. Ld. Advocate submits the copies of the following communications received by the respondents from the said Ministry of Industry, etc. noted above :-
(i) Dated 1st Jan., 1987 (now annexed as Annexure I to this order).
(ii) Dated 23rd Jan., 1987 (now annexed as Annexure II to this order).
(iii) Dated 3rd Feb., 1993 (now annexed as Annexure III to this order).
(iv) Dated 6th May, 1994 (now annexed as Annexure IV to this order).
Ld. Advocate submits that on a perusal thereof would show that the Ministry of Industry had allowed in principle the respondent's request in debonding vide their letter dated 1-1-1987 but subject to fulfilment of conditions enumerated therein. He submits that this was only a decision in principle and not an operative decision. He submits that this is made clear by their letter dated 23-1-1987 (Annexure II to this order) wherein it has been clearly specified that the debonding of this unit and withdrawal from Customs' control shall be allowed only after full duty as determined by the Customs Department has been paid. He submits that since the condition of 30% of the annual production to be exported could not be adhered to by the respondents, in consideration of their further application, the Ministry of Industry vide letter dated 3-2-1993 (Annexure HI to this order) gave them extension of time by two more years for achieving the said condition. This makes it clear that since the conditions subject to which the debonding was approved in principle are not even met as on 3-2-1993, extension of time for 2 years had been given by the competent authority to them. Ld. Advocate further submits that this position has been further clarified by the Ministry of Industry vide letter dated 6-5-1994 wherein in para 2 it has been clearly mentioned that the question of debonding of the unit would only be considered by this Ministry after full duty determined by the Customs has been paid and they have directed them to furnish evidence in this regard so that the 100% EOU status-could then be removed from them.
4. Ld. Advocate further submits that there is dear evidence in the form of these unambiguous correspondences received by the respondents from the Ministry of Industry to the effect that even as on 1-1-1994 they were still operating as a 100% EOU and were still to fulfil conditions necessary for them to be approved as a DTA unit.
5. Ld. DR reiterates the order impugned.
6. We have carefully considered these submissions and records of the case. The four communications have been appended to this order and a perusal thereof clearly demonstrates that even as on May 6,1994, the Ministry of Industry, Govt. of India which is the competent authority to either clothe the industry with 100% EOU status or to convert the said 100% EOU industry into a Domestic manufacturing unit, had recorded the respondents' as a 100% EOU as they have not fulfilled the conditions prescribed in their conversion to domestic unit. Therefore, the contention of Revenue in the order impugned that merely because the clearance in terms of those conditions had made on 8-1-1987 to domestic tariff area, would constitute that date as the relevant date for conversion from a 100% EOU to DTA is not correct in law. Even a 100% EOU are allowed certain percentage of their production to be cleared in the DTA. If the logic of Revenue is to be adopted, the moment the first clearance of 100% EOU into DTA was made legal, then that unit would cease to be a 100% EOU. This would not only be illogical in above terms but would also be legally untenable concept as the Customs have no authority under law to close or unclose a 100% EOU and bestow or remove the 100% EOU status to any industry, as under law that privilege and power only belongs to the Ministry of Industry in the Government.
7. In view of these findings and analysis, we find that there is no infirmity in the orders impugned by Revenue before us which compel us to interfere with the same and hence the Revenue's appeal is rejected.