Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise vs M/S Neha International Ltd on 20 August, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI
COURT NO. II
APPEAL NOs. E/145, 146/05
E/CO/123, 122/05
Arising out of Order-in-Appeal No. PI/BKS-110-111/2004 dated 29.09.2004 passed by the Commissioner of Central Excise (Appeals), Pune I.
For approval and signature:
Honble Shri Ashok Jindal, Member (Judicial)
Honble Shri P.S.Pruthi, 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?
Commissioner of Central Excise,
Pune I
:
Appellant
Versus
M/s Neha International Ltd.
Respondent
Appearance Shri S. Dewalvar, Addl. Commissioner (A.R.) for appellant None For Respondent CORAM:
Shri Ashok Jindal, Member (Judicial) Shri P.S. Pruthi, Member (Technical) Date of Hearing : 20.08.2014 Date of Decision : 20.08.2014 ORDER NO.
Per P.S. Pruthi Revenue is in appeals before us against the order of Commissioner (Appeals) dated 29.09.2004 whereby he had set aside the demands of duty of Rs.21,68,083/- and Rs.9,83,347/- and penalties against the respondent M/s Neha International Ltd.
2. The facts are that the respondent cleared Cut Flowers grown by their 100% EOU, into Domestic Tariff Area (DTA). The case of the respondent was that they have not availed any concession on indigenous inputs/raw materials and also did not use any imported inputs/raw materials. The Commissioner (Appeals) held that cut flowers are non-excisable and neither Customs duty nor Central Excise duty is demandable on the cut flowers cleared into DTA. The Commissioner (Appeals) relied on Vikram Ispat v. CCE Mumbai III 2000 (120) ELT 800 (Tri. LB) in which it was held that Customs duty is not leviable on DTA sales and only Central Excise duty can be charged under Section 3 of the Central Excise Act, 1944 in respect of the DTA clearances by 100% EOUs. He also relied similarly on Cosco Blossoms Pvt. Ltd. v. Commissioner of Customs, Delhi 2004 (164) ELT 423 (Tri. Del).
3. The learned A.R. relied on the Grounds of Appeal filed by the Revenue. He referred to para 3 of Notification No. 126/94-Cus dated 03.06.1994 which states that - 3. Notwithstanding anything contained in this notification, the exemption contained herein shall also apply to -
(a) the said goods which on importation into India are used for the purposes of production, manufacture or packaging of articles and such articles (including rejects, waste and scrap material arising in the course of production, manufacture or packaging of such articles) even if not exported out of India are allowed to be sold in India under and in accordance with the Export-Import Policy and in such quantity and subject to such other limitations and conditions as may be specified in this behalf by the Development Commissioner, on payment of duty of excise leviable thereon under section 3 of the Central Excises and Salt Act, 1944 (1 of 1944) or where such articles (including rejects, waste and scrap material) are not excisable, customs duty equal in amount to that leviable on inputs obtained under this notification and used for the purpose of production, manufacture or packaging of such articles, which would have been paid, but for the exemption under this notification, shall be payable at the time of clearance of such articles. 3.1 Revenue has also appealed on the ground that in the case of Cosco Blossoms Pvt. Ltd (supra) this Tribunal observed that however we make it clear that the revenue authorities will be at liberty to demand duty on the imported inputs if any used in the production of the cut flowers in question.
4. None appeared for the respondent. Heard the submissions of the learned A.R. for the Revenue. We have carefully gone through the case details.
5. We find that in this case what is demanded is the Central Excise duty on the DTA clearances. The relevant part of the statute i.e. Section 3 of the Central Excise Act provides that the duties of excise which shall be levied and collected on any excisable goods manufactured by a 100% EOU shall be an amount equal to aggregate of the duties of Customs which would be leviable on like goods produced or manufactured outside India and if imported into India. Therefore, the law is very clear. What is charged on domestic clearances by 100% EOU is duty of excise. In this case the goods namely cut flowers are non-excisable. The judgements cited by the Commissioner support this obvious interpretation of Section 3. Revenues appeals on the ground that the Notification provides otherwise is not acceptable because a Notification cannot override the basic provision of law for charging duty. Revenues reference to Cosco Blossoms Pvt. Ltd (supra) to justify the duty can be demanded on imported inputs is totally mis-placed and uncalled for because what was demanded in the show-cause notice is Central Excise duty.
6. In view of the above, Revenues appeals are dismissed. Cross Objections filed by the respondent are also disposed of in the above terms.
(Dictated in open Court) (Ashok Jindal) Member (Judicial) (P.S. Pruthi) Member (Technical) nsk ??
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