Custom, Excise & Service Tax Tribunal
M/S Eurotex Industries & Exports Ltd vs Commissioner Of Customs, Nhava Sheva on 6 September, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. II Appeal No. C/1632/05 (Arising out of Order-in-Appeal No. 136(100% EOU)/2005/JNCH dated 19.10.2005 passed by the Commissioner of Customs (Appeals), JNCH, Nhava Sheva). For approval and signature: Honble Shri M.V. Ravindran, Member (Judicial) Honble Shri Raju, 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 : Yes 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? ====================================================== M/s Eurotex Industries & Exports Ltd. Appellant Vs. Commissioner of Customs, Nhava Sheva Respondent Appearance: Ms. Manasi Patil, Advocate for Appellant Shri Chatru Singh, AC (AR) for Respondent CORAM: SHRI M.V. RAVINDRAN, MEMBER (JUDICIAL) SHRI RAJU, MEMBER (TECHNICAL) Date of Hearing: 06.09.2016 Date of Decision: 15.09.2016 ORDER NO. Per: Raju
This appeal has been filed by M/s Eurotex Industries & Exports Ltd., an EOU, against demand of duty on the High Speed Diesel imported by them for use in captive power plant. Additional Customs Duty @ Rs.2/- per liter was demanded from the appellants. The appellants are entitled to exemption on goods imported from whole of duty of customs under First Schedule to the Customs Tariff Act, 1975 and additional duty, if any, leviable under the said Customs Tariff Act subject to the condition specified in the Notification No. 52/2003-Cus dated 31.3.2003. The said exemption notification, however, does not specifically exempt the additional duty of Rs.2/- per liter imposed by Section 116 of the Finance Act, 1999. The appellant claimed that the Notification No. 59/99 dated 11.5.1999 exempts import of High Speed Diesel. The said notification reads as under: -
In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts high speed diesel oil, falling under heading No. 27.10 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1976), when imported into India, from so much of the additional duty leviable thereon under sub-section (1) of section 3 of the said Customs Tariff Act, as is equivalent to the additional duty of excise leviable on high speed diesel oil under section 133 read with Second Schedule of the Finance Act, 1999 (27 of 1999). The lower authorities denied the benefit of exemption and aggrieved by the said order, the appellants are in appeal before Tribunal.
2. Learned Counsel for the appellant argued that the issue is covered by the decision of Larger Bench of the Tribunal in the case of Paras Fab International 2010 (256) ELT 556 (Tri-LB). She argued that they are a 100% EOU and no liability can be imposed on them in view of the observation of the Larger Bench in para 10 of the said order. She further relied on the decision of the Tribunal in the case of I.C. Textiles Ltd. 2012-TIOL-734-CESTAT-AHM.
3. Learned AR relied on the impugned order.
4. We have gone through the rival submissions. We find that the Larger Bench of the Tribunal in the case of Paras Fab International (supra) has observed as under: -
10. On a perusal of the provisions relating to warehousing in the Customs Act, 1962 and the provisions relating to EOU Scheme under the Customs Manual, we find that the entire premises of a 100% EOU is required to be licensed as a customs bonded warehouse and the imported goods are required to be imported directly to such premises. The manufacturing is also required to be done within the bonded premises. Hence, we find support for the contention of the appellants that the entire premises of 100% EOU is a bonded warehouse. Neither the Manual nor the Customs Act speaks of any requirement to pay any duty on the warehoused goods which are used for manufacture in bond nor it requires filing of any ex-bond bills of entry at that stage. Section 68 of the Act deals with clearance of warehoused goods for home consumption and it requires filing of an ex-bond of Bill of entry payment of import duty and other charges and an order for clearance for home consumption. Section 65 of the Act which deals with manufacturing in bond on the other hand, does not require any filing of ex-bond bills of entry or payment duty before taking warehoused goods for manufacture inside the bonded premises. We also find that Section 66 of the Act empowers the Central Government to exempt imported material used in a warehouse. It is thus clear that neither the scheme of the Act nor the provisions contained in the Manual require filing of ex-bond bills of entry or payment of duty before taking the imported goods for manufacturing in bond nor there is any provision to treat such goods as deemed to have been removed for the purpose of Customs Act, 1962. The Warehousing provisions under the Customs Act, 1962 deals with two kinds of removals from the Customs bonded warehouse;-
(i) Removal under order of clearance of the proper officer after filing ex-bond bill of entry and payment of duty, etc. as provided under Section 68, and;
(ii) Improper removal for which Section 72 provides for demand of duty, penalty, interest etc. Impugned goods authorized to be used for in-bond manufacture under Section 65 do not fall under any of these categories. Tribunal in the case of I.C. Textiles (supra) in similar circumstances has observed as under: -
4. The facts are not in dispute inasmuch as, the appellant had transferred the High Speed Diesel (HSD) and had cleared the same to be used in the factory premise who is 100% EOU. Any goods which are moved into 100% EOU are exempted from payment of customs duty. In the same way, the additional duty of customs also cannot be levied. We find that this view has been expressed by the decision of the Tribunal in case of Commissioner of Customs, Jamnagar vs. Reliance Industries Limited and also by the Larger Bench of the Tribunal in the case of Paras Fab International vs. CCE, Kandla - 2010 (256) ELT 556 = (2010-TIOL-963-CESTAT-DEL-LB). Moreover the Notification No. 59/99 dated 11.5.1999 exempts high speed diesel oil, falling under heading No. 27.10 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1976), when imported into India, from so much of the additional duty leviable thereon under sub-section (1) of section 3 of the said Customs Tariff Act, as is equivalent to the additional duty of excise leviable on high speed diesel oil under section 133 read with Second Schedule of the Finance Act, 1999 (27 of 1999). In these circumstances, the High Speed Diesel is exempted from payment of the additional duty levied under Section 116 of the Finance Act, 1999.
5. In view of the above, the impugned order cannot be sustained. The appeal is allowed.
(Pronounced in Court on 15.09.2016) (M.V. Ravindran) (Raju) Member (Judicial) Member (Technical) Sinha 4 Appeal No. C/1632 /05