Customs, Excise and Gold Tribunal - Delhi
Commissioner Of Central Excise vs Ginni Filaments Ltd. on 7 October, 2002
Equivalent citations: 2003(152)ELT220(TRI-DEL)
ORDER V.K. Agrawal, Member (T)
1. In these appeals, filed by the Revenue, the issue involved is whether the Additional Duty of Excise under the Additional Duties of Excise (Textiles and Textile Articles) Act is leviable on the goods cleared from a 100% Export Oriented Undertaking to the Domestic Tariff Area or the Additional Duty of Excise is exempted under Notification No. 55/91-C.E., dated 25-7-91.
2. Shri Atul Dikshit, learned SDR, submitted that M/s. Ginni Filaments Ltd., a 100% E.O.U., manufacture Cotton Yarn and P.V. Synthetic Yarn; that a show cause notice was issued to them for demanding Additional Duty of Excise in respect of clearances effected by them during the month of March, 2000; that the Dy. Commissioner of Central Excise under the Adjudication Order No. 169/2000, dated 10-8-2000 confirmed the demand denying the benefit of Notification No. 55/91-C.E.; that however, the Commissioner (Appeals) under the impugned order allowed the appeal filed by the Respondents relying upon the decision in the case of CCE, Indore v. Maiklal Fibres Ltd., 2001 (127) E.L.T. 589 (Tri.) and Century Yarn v. CCE, Bhopal, 2001 (133) E.L.T. 93 (Tri.), and Board's Circular No. 384/17/98-CX., dated 20-3-98. The learned SDR submitted that Notification No. 8/97-C.E., dated 1-3-97 as amended by Notification No. 11/2000-CE., dated 1-3-2000 exempted goods manufactured in 100% E.O.U. and allowed to be sold in India from so much of duty as is in excess of an amount equal to the aggregate of the duty of excise leviable under Section 3 of the Central Excise Act or under any other law for the time being in force on like goods, produced or manufactured in India; that it is, thus, clear from the Notification No. 8/97 as amended w.e.f. 1-3-2000 that additional excise duty was also to be paid in addition to the basic excise duty in respect of Yarn sold by the Respondents in the Domestic Tariff Area; that this was also clarified by the Board under Circular No. 554/50/2000-CX., dt. 19-10-2000. The learned D.R. finally relied upon the decision of the Punjab & Haryana High Court in the case of Vardhman Polytex Ltd. v. U.O.I. - 2001 (135) E.L.T. 17 (P & H) wherein the Hon'ble High Court considered the effect of Notification No. 8/97-C.E. as amended by Notification No. 11/2000-CE. and held that the object of amendment appears to be to bring a parity between 100% E.O.Us, and other manufacturers in the matter of payment of duties in respect of goods manufactured and allowed to be sold in India. The Punjab & Haryana High Court also held that the expression "Any other Law for the time being in force" used in Notification No. 11/2000-C.E. is of wide amplitude, and therefore, it would take within its fold the 1978 Act and the logical consequence and issuance of notification dated 1-3-2000 is that the petitioners are liable to pay Basic Excise duty along with Additional Excise duty in respect of clearances made to D.T.A. The learned SDR, further, mentioned that the Appellate Tribunal in the case of Parasrampuria International v. CCE, Indore, vide Final Order No. 184/2002, dated 17-7-2002 [2003 (152) E.L.T. 142 (Tribunal)] has denied the benefit of Notification No. 55/91 to the Appellants therein following the judgment of the Punjab & Haryana High Court.
3. On the other hand Shri M. Chander Shekher, learned Sr. Advocate, submitted that the Ministry of Finance under Circular No. 384/17/98-CX., dated 20-3-98 has clarified that Notification No. 55/91 exempts excisable goods produced or manufactured in a 100% EOU from the whole of the duty of excise leviable under Section 3 of the Additional Duty of Excise (Textiles & Textile Articles) Act, 1978; that the Ministry, further, clarified that the as-sessee who is claiming the benefit of the Notification No. 8/97-C.E., dated 1-3-97 will be eligible to claim benefit under Notification No. 55/91-C.E. and the same should not be denied to them; that in March, 2000 when the goods were cleared by the Respondents this Circular of the Ministry of Finance was in existence, and therefore, the Revenue cannot make any claim contrary to the clarification given under the Circular, that another Circular No. 554/50/2000-CX., dated 19-10-2000 was issued much after the material period involved in the present appeal and that Circular will be effective from the date of issue and not in respect of clearances effected prior to its issuance.
The learned Sr. Counsel, further, submitted that it has been held by the Supreme Court in the case of H.M. Bags Manufacturer v. CCE, 1997 (94) E.L.T. 3 (S.C.) that any order under Section 37B of the Central Excise Act is effective from the date of its publication and the date for raising the demand by the Revenue cannot be any date prior to its publication. He also relied upon the decision of the Supreme Court in the case of CCE v. Dhiren Chemical Industries, 2002 (139) E.L.T. 3 (S.C.) wherein it has been held that regardless of the interpretation that has been placed by the Supreme Court, if there are circulars which have been issued by the Central Board of Excise & Customs which place a different interpretation, that interpretation will be binding on the Revenue. The learned Sr. Counsel also mentioned that the similar views were reiterated by the Supreme Court in the case of CCE v. Dhiren Chemical Industries, 2002 (143) E.L.T. 19 (S.C.). He, therefore, contended that as Circular dated 20-3-98 was still in existence in March, 2000 the Respondents are not liable to pay Additional Duty of Excise.
4. In reply the learned SDR mentioned that Circular dated 20-3-98 was not issued with reference to the clearance of excisable goods manufactured by a 100% EOU to the Domestic Tariff Area, that this situation has been clearly explained by the Punjab & Haryana High Court in Vardhman Polytex case wherein it has been observed by the High Court that "Notification No. 55/91-CE., dated 25-7-91 is directly relatable to the goods manufactured by a 100% E.O.U and exported out of India and Notification No. 8/97-C.E., dated 1-3-97 pertains to exemption in respect of duties leviable on goods cleared by 100% EOU in D.T.A."
5. We have considered the submissions of both the sides. Proviso to Section 3 of the Central Excise Act provides that the duties of excise which shall be levied and collected or any excisable goods which are manufactured by a 100% E.O.U. and allowed to be sold in India shall be an amount equal to the aggregate to the duties of Customs which would be leviable under Section 12 of the Customs Act on like goods produced or manufactured outside India, if imported into India. Notification No. 8/97, dated 1-3-97 before its amendment in March, 2000 exempted finished products, rejects and waste or scrap manufactured in India and allowed to be sold in India as is in excess of an amount equal to the amount of duty of excise leviable under Section 3 of Central Excise Act on like goods manufactured in India other than in a 100% E.O.U. This notification was amended by Notification No. 11/2000 by which the exemption under Notification No. 8/97 was in excess of an amount equal to the aggregate of the duties of excise leviable under Section 3 of the Central Excise Act or under any other law for the time being in force clearly goes to show that w.e.f. 1-3-2000 exemption was available to the goods manufactured and cleared by a 100% E.O.U. to the Domestic Tariff Area which is in excess of aggregate of all the duties leviable under Central Excise Act or under any other law for the time being in force. The Respondents are claiming the benefit of exemption from Additional Excise duty under Notification No. 55/91 which reads as under : -
"In exercise of the powers conferred by Sub-section (1) of Section 5A of the Central Excises and Salt Act, 1944 (1 of 1944), read with Sub-section (3) of Section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts all excisable goods produced or manufactured in a hundred per cent Export Oriented Undertaking from the whole of the duly of excise leviable thereon under the second mentioned Act."
6. It is the contention of the learned Sr. Counsel for the Respondents that as per Board's Circular dated 20-3-98 both Notifications 8/97 and 55/91 provided specific exemption from payment of excise duty under two different acts and an assessee who is claiming the benefit of Notification No. 8/97 will be eligible to claim benefit under Notification No. 55/91. It is also their contention that as this Circular has not been withdrawn in March, 2000 the Revenue cannot deny them the benefit of notification and the Circular issued in October, 2000 will be applicable only prospectively and not retrospectively. We find that the matter is no more res integra as the Punjab & Haryana High Court in the case of Vardhman Polytex Ltd. has considered the effect of both the notifications and the Circular issued by the Ministry of Finance. It has been held by the Punjab & Haryana High Court that Notification No. 55/91 is relatable to the goods manufactured by 100% E.O.Us and exported out of India and Notification No. 8/97 pertains to exemption in respect of duties leviable on goods cleared by 100% E.O.Us in D.T.A. In view of the judgment of the Punjab & Haryana High Court and also the fact that Notification No. 8/97 has been amended by Notification No. 1 1/2000, Additional Excise duty (A.E.D.) is payable by the Respondents. Circular dated 20-3-98 was issued much before the amendment effected in the notification No. 8/97, and therefore, the Circular cannot be made applicable in the changed circumstances. Accordingly, we allow all the appeals filed by the Revenue.