Custom, Excise & Service Tax Tribunal
Eurotex Industries & Exports Ltd vs Commissioner Of Central Excise, ... on 16 August, 2011
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. I APPEAL No.C/614/03 (Arising out of Order-in-Appeal No.P-II/BKS/161/2003 dated 26/06/2002 passed by Commissioner of Central Excise & Customs (Appeals-II), Pune) For approval and signature: Honble Mr. S.S. Kang, Vice President Honble Mr. P.R. Chandrasekharan, Member (Technical) ======================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
====================================================== Eurotex Industries & Exports Ltd., Appellant Vs. Commissioner of Central Excise, Kolhapur Respondent Appearance:
Ms.Padmavati Patil, Advocate for appellant Shri.V.K. Singh, SDR, for respondent CORAM:
Honble Mr. S. S. Kang, Vice President Honble Mr. P.R.Chandrasekharan, Member (Technical) Date of Hearing : 16/08/2011 Date of Decision : 16/08/2011 ORDER NO Per: P. R. Chandrasekharan
1. This appeal is directed against the order-in-appeal No. P-II/BKS/161/2003 dated 26/06/2002 passed by Commissioner of Central Excise & Customs (Appeals-II), Pune).
2. Briefly, stated the facts are as follows:
2.1 The appellants are a 100% EOU engaged in the manufacture of cotton yarn and knitted fabrics. They had imported Murata Autoconer Winding Machine falling under chapter 84 of the Customs Tariff Act, availing full exemption under notification No.53/97-Cus dated 03/06/97. After using the machine for quite some time, the appellants cleared the said machine in DTA on payment of duty of Rs.1,31,447.50 @ 10% on depreciated value of the machine. A show-cause notice was issued to the appellant vide notice dated 30/10/98 alleging that the appellant was liable to discharge Customs duty liability of Basic Customs Duty (BCD) @ 10%, Special Customs Duty (SCD) @ 5% and Additional duty @ 13%, totalling to an amount of Rs.3,93,686/- in terms of the provisions of the said notification No.53/97-Cus. The appellant contended that the expression customs duty applicable referred to in the said notification relates to only the basic duty of customs and not to the other duties and, therefore, they have correctly discharged the duty liability and are not liable to pay any further duties. The lower adjudicating authority did not accept the plea of the appellants and confirmed total duty demand of Rs.3,93,686/- The appellants preferred an appeal before the Commissioner (Appeals), who rejected the appeal vide the impugned order and, hence, the appellants are before us.
3. The Ld. Counsel for the appellant submits that the expression duty of Customs referred to in a Customs Notification No.53/97-Cus of the Customs Act covers only Basic Customs Duty and does not include additional duty and other duties of Customs, as has been held by the honble apex Court in the case of CEAT Tyres of India Ltd., Vs. UOI, reported in 2006 (200) ELT 353 (SC). The Counsel further relied on the judgement of the honble Bombay High Court in the case of Modern Syntex (India) Ltd., Vs. UOI, reported in 1993 (63) ELt 17 (Bom) which was upheld by the honble apex Court in the same case reported in 2001 (128) ELT A-76 (SC). On this basis, the Ld. Counsel submits that the impugned order is wrong and they are liable to discharge only the Basic Customs Duty on the depreciated value of the machine, when the same was cleared to the DTA.
4. The Ld. SDR on the other hand submits that notification No.53/97 under which the appellant has claimed the benefit at the time of importation grants exemption not only in respect of the duty of Customs leviable thereon under the First Schedule to the Customs Tariff Act, 1975 but also in respect of the additional duty, if any, leviable thereon under Section 3 of the said Customs Tariff Act, subject to the conditions specified therein. Condition No.5 of the said notification provides that, Where it is shown to the satisfaction of the Assistant Commissioner of Customs that the said unit has been allowed by the Development Commissioner or the said Board to clear any of the said goods for being taken to any other place in India in accordance with the Export and Import Policy (a) such clearance of capital goods, material handling equipment, office equipment and captive power plants may be allowed on payment of an amount equal to the customs duty leviable on such goods on depreciated value thereof and the rate in force on the date of payment of such duty. Since the notification grants exemption not only from Basic Customs duty but also from the additional duty of Customs, the condition also should relate to the same type of duties and the appellant cannot take advantage of the full benefit of the notification without complying with the condition specified therein.
5. We have carefully considered the rival submissions.
6. We find that in the case of CEAT Tyres India Ltd., and Modern Syntex (India) Ltd., relied upon by the appellants, the facts of those case are different. In those cases, exemption was provided under Section 25 of the Customs Act, 1962 in respect of only BCD and not in respect of any other duties of Customs. Hence, the facts are distinguishable and, therefore, the ratio of these judgments are not relevant. In the present case, notification No.53/97-Cus dated 03/06/97 grants exemption not only in respect of basic duty of customs leviable under Section 12 of the Customs Act, 1962 but also in respect of the additional duty of Customs leviable under Section 3 of the Customs Act, 1975. Since BCD is exempt, Special Customs Duty (SCD) which is chargeable as a percentage of BCD also becomes exempt. When conditions are stipulated in the notification, for availing the exemption, the said condition should apply not only in respect of the exemption from BCD but also in respect of the additional duty of Customs levied under Section 3 of the Customs Tariff Act and all other duties, which are exempt as a consequence. Therefore, the appellant cannot take the plea that the conditions stipulated therein will apply in respect of basic duty of customs. Since the appellant availed the exemption in respect of not only the Basic duty of Customs, but also in respect of additional duty of Customs and Special duty of Customs at the time of importation, when the goods are subsequently cleared from 100% EOU to DTA after obtaining the requisite approval, these duty liabilities have to be discharged on the depreciated value of the goods. In other words, the appellant has to discharge the duty liability on the depreciated value not only in respect of the basic customs duty but also in respect of the additional duties of Customs @ 13% and the special duty of Customs @ 5%. Thus, the duty demand on the appellant for an amount of Rs.3,93,686/- including all the above duties has been correctly made and the appellant is liable to discharge this duty amount. Since the appellants have already paid an amount of Rs.1,31,448/-though under the incorrect accounting head of Central excise duty, they are liable to discharge only the balance duty amount of Rs.2,62,238/- and the amount of Rs.1,31,448/- paid by the appellant shall be adjusted towards the total duty demand of Rs.3,93,686/-. Thus, we find that the appeal filed by the appellant has no merit and accordingly, the same is dismissed subject to the adjustment of amount already paid as mentioned above.
(Pronounced in Court) (S.S. Kang) Vice President (P.R. Chandrasekharan) Member (Technical) pj 1 2