Customs, Excise and Gold Tribunal - Delhi
Kurt-O-John Shoe Components (India) ... vs Cce on 28 July, 2003
Equivalent citations: 2003ECR342(TRI.-DELHI), 2003(158)ELT300(TRI-DEL)
ORDER
V.K. Agrawal , Member (Technical)
1. In this Appeal filed by M/s. Kurt-o-John Shoe components (India) Pvt. Ltd. whether the clearances effected under Paragraph 9.10 (b) of the EXIM Policy 1997-2002 has to be taken into consideration for the purpose of determining the limit of sale of goods by a 100% Export Orented Undertaking into Domestic Tariff Area.
2. Shri J.M. Sharma, learned Consultant, submitted that the Appellants is a 100% Export Oriented Undertaking approved to manufacture and export soles, heels, tops lifts and emblems, hat Para 9.10 (b) of the EXIM Policy provides that supplies from 100% Export Orented Undertaking effected into D.T.A. against payment in foreign exchange shall be counted towards fulfillment of export performance; that the Appelants have supplied goods into DTA against payment in foreign exchange on payment of full Central Excise duty and such supplies were counted towards fulfillment of export performance and were considered as export for all purposes by the Appellants; that in accordance with tha law and procedure prescribed in the EXIM Policy read with Handbook of Procedure, the Development Commissioner, NOIDA Export Processing Zone granted permission for sale of approved items in terms of Para 9.9 (b) of EXIM Policy subject to payment of applicable duties and against the export performance of the appellants: that the Commissioner under the impugned Order had demanded the Central Excise duty and imposed penalty of eqivalent amount on the ground the FOB value of export is determined by taking the value of physical export and sales made to specified private bonded warehouse and that term export used in Notification No.2/95-C E dated 4.1.95 is to be construed as defined in Central Excise Act and Rules made thereunder; that as per Rules 12 and 13 of the Central Excise Rules, 1944, export means the clearances of the goods wich left the country which is also known as physical export; that the Commissioner has further held that for the purpose of Notification No. 2/95-C E, only the physical exports are to be taken for determination of FOB value.
3. Learned Consultant, further sumitted that the issue involved is fully covered by the decision of the Tribunal in the case of Ginni International Ltd. Vs. CCE, Jaipur 2001 (47) RLT 412 wherein the Tribunal has held that once the Development Commisioner has alowed them the permission to sell the goods up to a fixed value in DTA, the revenue cannot disallow the clearance and demand the Central Excise duty on the ground that the entitlement was required to be restricted to 50% of FOB value of physical exports; that the Trbunal observed that the Revenue is of the view that the value of the deemed exports should not have been taken into consideration for arriving at the value of the goods to be alloed to be sold in the DTA, he matter should have been taken up with the Development Commissioner who had initially accorded the permission to the Appellant. He also relied upon the decision in the case of Virlon Textile Mills vs. CCE Mumbai 2002 (50) RLT 349 (CEGAT) wher in the Tribunal had held that the supplies made by the Appellants in domestic tariff area against the payment in foreign exchange will be deemed, for the purpose of Para 9.9, to have been exported. He, further, said that these decisions have been consistently followed by the Tribunal in a number of cases and one of such case in Morgaon Tetronics Ltd. vs. CCE NOIDA, 2003 (55) RLT 26 (CEGAT).
4. Countering the arguments, Shri O.P. Arora. Learned Senior Departmental Representative, reiterated the findings as contained in the impugned Order and submitted that as per clause (b) of tird proviso to Notification No. 2/95 CE, the total value of gods being cleared under Paragraphs 9.9 and 9.20 of the Export and Import Policy for home consumption will not exceed 50% of the free on board value of exports made during the year by the said unit and the unit has fulfilled the minimum Net Foreign Exchange earning as a percentage of exports prescribed in appendix I of the Policy; that the Commissioner has distinguished the decision in the case of Ginni Internatonal in the impugned Order by holding that the Tribunal had examined applicability of exemption provided under Notification No. 8/97 C E in Ginni Internatonal and in the said notification it was not specified as to what would be the quantum of the goods available for exemption and in absence of it, the Tribunal has held that the quantum of the goods for the exemption would be as given in Para 9.9 (b) of the EXIM Policy whereas the present matter involves the question of the admissibility of exemption under Notification No. 2/95 C E wherein it is clearly provided that exemption would be availle for a value of 50% of FOB value of export.
5. We have considered the submissions of both the sides. Notificaton No. 2/95 C.E, dated 4.1.95 provides concessional rate of duty of excise in respect of excisable goods produced or manufactured in a 100% Export Orientd Undertaking and allowed to be sold in India in accordance with the provisions of sub paragraph (a), (b),(c) and (d) of Paragraph 9.9 or of Paragraph 9.20 of the Export and Import Policy 1997-2002. As Per paragraph 9.9 (b) of the EXIM Policy, DTA sale up to 50% of the FOB value of exports may be made subject to payment of applicable duties and fulfillment of minimum NFEP prescribed in appendix 1 of the Policy. As per paragraph 9.10 of the Policy, supplies effected in DTA against payment in foreign exchange shall be counted towards the fulfillment of export performance. It has been submitted by the Appellants that they has sold the gods after obtaning written permission from the Development Commissioner, NEPZ. The issue involved in the present matter is squarely covered by the decisions relied upon by the learned Consultants. The Appellate Tribunal in the case of Virlon Textile Mills (supra) has considered th matter with reference to Notification No.2/95 CE wherein the Tribunal has held that Paragraphs 9.9 and 9.10 deals with two different issues altogether. Paragraph 9.9 prescribd the mode of disposal of the goods manufactured by a 100% Export Oriented Undertaking Among these are gods sold in the domestic tariff area upto 50% of the FOB value of the exports. Paragraph 9.10 consists series of deaming provisions holding that the supplies to domestic tariff area of various kinds among which those made against payment in foreign exchange shall be cunted towards fulfllment of export performance. Therefore, the supplies made by the Appellans to the domestic tariff area against payment in foreign exchange will be deemed, for purpose of Paragraph 9.9, to have been exported. From this it would follow that up to 50% of the value of such supplies could be sold at the concessional rate of duty available in the Notification No. 2/95 supplies to domestic tariff area against foreign exchange would be treated on the same footings as physical exports." We also abserve that Appellate Tribunal has considered the question about the authority of Development commissioner to determine the extent of DTA sale in the case of Ginni International Ltd. (supra). The Tribunal was of the view that once the Development commissioner has allowd the appellans permisson to sell the gods up to a fixed value in the DTA, the Revenue cannot disalloow clearance and demand Central Excise duty on the ground that the entitlement was reqired to be restricted to 50% of the FOB value of physical exports. Following the decisions in Ginni International and Virlon Textile Mills, the Appellate Tribunal in the case of Morgaon Tettronics Ltd. allowed the Appeal filed by the Appellants against the Adjudicaton Order by which the commisioner has confirmed the demand of Central Excise duty in respect of sales made in Domestic Tariff Area and not agreeing with the Department that sale entitlement would accrue only against physical exports and partial exemption of DTA clearances under Notification No. 2/95 C E was available only against physical export.
6. Following the ratio of these decsions we allow the Appeal.