Custom, Excise & Service Tax Tribunal
Piramal Healthcare Ltd vs Chennai-I on 19 December, 2023
Excise Appeal No.41296 of 2014
1
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL,
SOUTH ZONAL BENCH, CHENNAI
COURT HALL No.III
EXCISE APPEAL No.41296 of 2014
(Arising out of Order-in-Appeal No.18/2014 (M-I)) dated 03.03.2014 passed
by Commissioner of Central Excise (Appeals), 26/1, Mahatma Gandhi Road,
Nungambakkam, Chennai - 600 034.)
M/s.Piramal Healthcare Limited ...Appellant
(100% EOU), Ennore Express Highway,
Ennore, Chennai - 600 067.
Versus
The Commissioner of Central Excise ...Respondent
26/1, Mahatma Gandhi Road,
Nungambakkam,
Chennai - 600 034.
APPEARANCE:
Shri. M. Karthikeyan, Advocate
For the Appellant
Shri. Harendra Singh Pal, Asst., Commissioner (AR)
For the Respondent
CORAM:
HON'BLE MS. SULEKHA BEEVI C.S., MEMBER (JUDICIAL)
HON'BLE MR. VASA SESHAGIRI RAO, MEMBER (TECHNICAL)
DATE OF HEARING: 30.11.2023
DATE OF DECISION:19.12.2023
FINAL ORDER No.41129/2023
ORDER:Per Ms. SULEKHA BEEVI C.S. Brief facts are that the appellant (100% EOU) is engaged in the manufacture of bulk drugs and medicaments. They had imported 24,250 kilograms of Ammonium Persulfate, without payment of duty in terms of Notification No.52/2003 CUS dated 31.03.2003, which got Excise Appeal No.41296 of 2014 2 destroyed in a fire accident that took place in the factory premises on 09.07.2010.
1.1. The appellant requested for remission of duty vide letter dated 13.09.2010. The appellant paid customs duty of Rs.2,23,775/- along with interest of Rs.12,837/- vide challan dated 16.12.2010. Further, they also paid Rs.8,55,993/- towards anti-dumping duty (ADD) on 11.04.2011.
1.2. The appellant had informed the department vide letter dated 27.04.2011, that the duty has been paid under protest. Later, the appellant preferred refund claim of Rs.10,79,768/- along with interest of Rs.12,832/- on the grounds that they are entitled for remission of duty on goods destroyed in the fire and that they are not liable to pay anti-dumping duty (ADD).
1.3. The appellant was issued Show Cause Notice dated 08.11.2011, proposing to reject the refund claim. After due process of law, the Original authority rejected the refund claim of Rs.8,55,993/-, being the anti-dumping duty. The Original authority also rejected the claim of Rs.2,23,775/- paid towards customs duty and interest of Rs.12,832/-, as being time barred. The appellant preferred an appeal before the Commissioner (Appeals) who upheld the same. Hence this appeal.
2. The Learned Counsel, Shri. M.Karthikeyan appeared and argued for the appellant.
2.1 It is submitted that there was a fire accident in their 100% EOU on 09.07.2010 and in the said accident, 24,250 Kilograms of Ammonium Persulphate, which was imported without payment of duty in terms of Notification No.52/2003 CUS dated 31.03.2003 got Excise Appeal No.41296 of 2014 3 destroyed. The appellant submits that Anti-dumping duty is levied in terms of Section 9A (1) and (2) of the Customs Tariff Act and Section 9A(2A) of the Act ibid provides that such levy shall not apply to goods imported by an EOU unless the Anti-dumping duty notification specifically levies the duty on imports made by EOU or the EOU clears the imported product attracting ADD into DTA either as such or use the imported product in the manufacture of any goods which is cleared in DTA.
2.2 In the instant case, the Anti-dumping duty is levied in terms of Notification 96/2007 CUS dated 29.8.2007, but the said notification does not impose the levy on goods imported by an EOU. Secondly, it is an admitted fact that the imported goods have got destroyed within the EOU and it has not been cleared at all from the EOU in DTA. Under the circumstances, the levy of ADD is not applicable on the ammonium persulphate imported by the EOU and which got destroyed in the fire accident within the EOU. Therefore, the appellant has erroneously paid ADD on such goods destroyed and they are entitled for the refund of the same. Though the appellant has specifically put forth their submissions based on the above provisions contained in Section 9A(2A) before the lower authorities, they have neither considered the same nor recorded any finding in this regard.
3. The Learned AR, Shri. Harendra Singh Pal, appeared and argued for the department.
3.1 The contention of the appellant is that as per Section 9A of the Customs Tariff Act, the levy of anti-dumping duty is not applicable for the imports made by an export oriented unit (EOU). Therefore, they Excise Appeal No.41296 of 2014 4 are not eligible for the benefit of notification No.52/2003 CUS, in respect of the materials destroyed in the fire accident. 3.2 The appellant is not eligible for the claim as per the Notification No.52/2003, for the reason that the inputs were not used in the manufacture of final products. So also the inputs were not cleared as such into DTA, on payment of duty by the appellant. 3.3 Having not fulfilled the conditions as per the Notification No.52/2003 CUS, the appellant is not eligible for exemption from anti- dumping duty and therefore the payment of ADD to the tune of Rs.8,55,993/- by the appellant is proper. The appellant is not eligible for any refund. It is prayed that the appeal may be dismissed.
4. Heard both sides.
5. It needs to be stated that the refund claim though preferred for Rs.10,79,768/- and interest of Rs.12,832/-, the claim in this appeal is limited to refund of Rs.8,55,993/-, being the ADD paid by the appellant. It is submitted by the appellant that the insurance company, reimbursed the customs duty (excluding the anti-dumping duty) and therefore, they are not claiming for refund of Rs.2,23,775/- and interest of Rs.12,832/- being customs duty paid by them. 5.1 The appellant has enclosed a letter dated 27.04.2011, which shows that the anti-dumping duty has been paid by them under protest. The Show Cause Notice dated 08.11.2011, alleges that as the goods were imported duty free under Notification No.52/2003 CUS dated 31.03.2003 and were destroyed by fire, the conditions stipulated in the notification no.52/2003 dt.31.03.2003 have not been fulfilled by the appellant and therefore, the appellant is not eligible to claim Excise Appeal No.41296 of 2014 5 exemption under Notification No.52/2003 dated 31.03.2003. It is also the view of the department that for the same reason the appellant is not eligible for exemption from ADD, as per Notification No.5/1994 CUS dated 18.11.1994, in as much as the goods imported were not wholly exempted from payment of customs duty for the reason that the appellant did not satisfy the conditions stipulated under Notification No.52/2003 CUS dated 31.03.2003.
5.2 The Learned Counsel has adverted to Section 9A (2A) of Customs Tariff Act, 1975 which reads as under:
Prior to 28.03.2021 [(2A) Notwithstanding anything contained in sub-section (1) and sub- section (2), a notification issued under sub-section (1) or any anti-dumping duty imposed under sub-section (2), shall not apply to articles imported by a hundred percent, export-oriented undertaking unless,: -
(i) specifically made applicable in such notifications or such impositions, as the case may be; or
(ii) the article imported is either cleared as such into the domestic tariff area or used in the manufacture of any goods that are cleared into the domestic tariff area, and in such cases anti-dumping duty shall be levied on that portion of the article so cleared or so used as was leviable when it was imported into India.
Explanation - For the purposes of this sub-section, the expression "hundred percent export-oriented undertaking'' shall have the meaning assigned to it in Explanation 2 to sub-section (1) of section 3 of the Central Excise Act, 1944; (1 of 1944)]."
Excise Appeal No.41296 of 2014 6 After 28.03.2021 [(2A) Notwithstanding anything contained in sub-section (1) and sub- section (2), a notification issued under sub-section (1) or any anti- dumping duty imposed under sub-section (2) shall not apply to articles imported by a hundred percent export oriented undertaking or a unit in a special economic zone, unless: -
(i) it is specifically made applicable in such notification or to such undertaking or unit; or
(ii) such article is either cleared as such into the domestic tariff area or used in the manufacture of any goods that are cleared into the domestic tariff area, in which case, anti-dumping duty shall be imposed on that portion of the article so cleared or used; as was applicable when it was imported into India.
Explanation - For the purposes of this section: -
(a) the expression "hundred percent export-oriented undertaking" shall have the same meaning as assigned to it in clause (i) of Explanation 2 to sub-section (1) of section 3 of the Central Excise Act, 1944 (1 of 1944.);
(b) the expression "special economic zone" shall have the same meaning as assigned to it in clause (za) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005.)] 5.3 The above provision of law as it stood prior to 28.03.2021, as well as after the said date, provides that the anti-dumping duty shall not apply to articles imported by 100% EOU or a unit in a Special Economic Zone, unless it is specifically made applicable in the notification.
Excise Appeal No.41296 of 2014 7 5.4 In the present case, Notification No.96/2007 CUS dated 29.08.2007, which imposes the levy of anti-dumping duty on the goods does not make any mention that it is specifically made applicable to EOU/SEZ. The second condition is that the goods imported are either cleared as such into DTA or used in the manufacture of any goods that are cleared into the DTA. The goods having been destroyed in fire, there is no occasion of the goods cleared as such into DTA or used in the manufacture of finished products for clearance into DTA. 5.5 The department has relied upon Notification No.5/1994 CUS dated 18.11.1994. The said notification also states that only if the goods are cleared as such into DTA or used for manufacture of finished products and are cleared into DTA, the exemption of the notification would become ineligible.
5.6 The goods imported were destroyed in fire and therefore, there is no requirement to look into the fulfilment of the conditions of Notification No.52/2003 dated 31.03.2003. We find that the appellant is eligible for remission of duty. Having been paid under protest, the appellant is eligible for refund.
5.7 In the result, the impugned order is set aside. The appeal is allowed with consequential reliefs, if any.
(Pronounced in court on 19.12.2023)
(VASA SESHAGIRI RAO) (SULEKHA BEEVI C.S.)
Member (Technical) Member (Judicial)
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