Bombay High Court
Brintons Carpets Asia Private Limited vs Commissioner Of Central Excise, Pune on 3 July, 2024
Author: K. R. Shriram
Bench: K. R. Shriram
2024:BHC-OS:9767-DB
Tauseef 14-CEXA.26.2022.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
CENTRAL EXCISE APPEAL (CEXA) NO.26 OF 2022
Brintons Carpets Asia Private Limited ...Appellant
Versus
Commissioner of Central Excise ...Respondent
WITH CUSTOMS APPEAL (CUAPP) NO.37 OF 2022 Brintons Carpets Asia Private Limited ...Appellant Versus Commissioner of Customs, Pune ...Respondent __________ Mr. Sriram Sridharan a/w. Mr. Dhananjay Sethuraj for Appellant. Mr. Dhananjay B. Deshmukh i/b. Mr. Jitendra B. Mishra for Respondent.
__________
CORAM : K. R. SHRIRAM,
JITENDRA JAIN, J.J.
DATED : 3rd JULY 2024
P.C.
1. Both these appeals have been filed against the common order dated 10th February 2022 and hence we are disposing both appeals by this common order.
2. These appeals filed under Section 130 of the Customs Act, 1962 (the Customs Act) impugns an order dated 10th February 2022, passed by the Customs, Excise & Service Tax Appellate Tribunal 1 of 4 ::: Uploaded on - 05/07/2024 ::: Downloaded on - 16/07/2024 21:17:47 ::: Tauseef 14-CEXA.26.2022.doc (CESTAT), WZB, by which a part of the relief sought in the appeal came to be rejected. To that extent, appellant is aggrieved.
3. The issue involved pertains to demand of duty foregone on raw materials (imported as well as indigenously procured) used in the manufacture of the finish goods cleared into Domestic Tariff Area (DTA) by debiting credit scrips issued under the Served From India Scheme (SFIS) without payment of duty in terms of Notification No.34/2006- CE. Mr. Sridharan submitted that the Tribunal, in the impugned order, relying on proviso to Section 5A of the Central Excise Act, 1944, held that Notification No.34/2006-CE dated 14th June 2006 does not extend the benefit of exemption to the goods manufactured by an EOU unit and consequently, duty foregone on raw materials used in manufacture of finished goods cleared into DTA by debiting duty scrips is recoverable. Mr. Sridharan submitted that this point was never raised by the Revenue either in the show cause notice or in the orders passed by lower authorities or before the Appellate Tribunal. Mr. Sridharan submitted that even in the show cause notice, it is only alleged that the clearance from 100% EOU under SFIS is not mentioned in paragraph 3 of Notification No.52/2003-Cus dated 30th March 2003 and paragraph 6 of Notification No.22/2003-CE dated 31st March 2003 and hence appellant was not eligible to clear carpets from 100% EOU under SFIS based on Notification No.34/2006-CE.
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4. We have considered the show cause notice and orders passed by the lower authorities and also CESTAT.
5. The dispute before the Tribunal was limited as to whether debiting of duty credit scrips issued under the SFIS on clearance of finish goods from EOU to DTA would amount to payment of duty or will amount to availment of exemption benefit in terms of Notification No.34/2006-CE. The Tribunal was to consider whether debit of the scrips issued under SFIS is due discharge of the duty liability as prescribed in proviso to Section 3 of the Central Excise Act, 1944 or not. We are satisfied with the submissions of Mr. Sridharan that the Tribunal has traveled beyond the scope of dispute and has upheld duty demand by relying upon proviso to Section 5A of the Central Excise Act, 1944, which was never raised by the Department either in the show cause notice or the orders passed by the lower authorities. It is settled law that the Tribunal shall not travel beyond the scope of relief and the case made out in the show cause notice.
6. In the light of the above, we think it is a fit case to interfere. The impugned order dated 10th February 2022 to the extent it opposed the demands of duty along with applicable interest is quashed and set aside and remanded to the CESTAT to decide afresh.
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7. Since the issue involved pertains to period of September 2008 to May 2009, the Tribunal is requested to dispose the matter before 31 st December 2024.
[JITENDRA JAIN, J.] [K. R. SHRIRAM, J.]
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