The Supreme Court Bench comprising Hon’ble Mr. Justice S.H. Kapadia and Hon’ble Mr. Justice B. Sudershan Reddy on 9-7-2008 after condoning the delay dismissed the Civil Appeal No. D 10301 of 2008 field by Commissioner of Central Excise & Customs, Surat against the CESTAT Final Order Nos. A/1577-1578/2007-WZB/AHD, dated 17-7-2007 as reported in 2007 (216) E.L.T. 589 (Tri.-Ahmd.) (Commissioner v. Amitex Silk Mills P. Ltd.).
The Appellate Tribunal vide its impugned order had held that the deemed exports made by the assessee-EOU to another EOU for the further use in manufacture and exports, were required to be treated on par with the physical exports and in view of the Tribunal’s decision in 2006 (196) E.L.T. 34 (Tri.-Del.), such clearances were clearly within the permissible limit of DTA sales.
The Tribunal had also held that there was no infirmity in the order of the Commissioner in not demanding duty on raw materials which have been used in the manufacture of finished products/wastes and rejects sold in DTA with the permission of the Development Commissioner as such raw materials were admittedly issued for manufacture in the 100% EOU and no raw material as such had been diverted elsewhere.
[Commissioner v. Amitex Silk Mills P. Ltd. - 2010 (254) E.L.T. A98 (S.C.)]
2. Passed by CESTAT, Mumbai.
2007 (216) E.L.T. 589 (Tri. - Ahmd.)
IN THE CESTAT, WEST ZONAL BENCH, AHMEDABAD
[COURT NO. II]
S/Shri T. Anjaneyulu, Member (J) and M. Veeraiyan, Member (T)
COMMISSIONER OF C. EX. & CUS., SURAT
AMITEX SILK MILLS P. LTD.
Final Order Nos. A/1577-1578/2007-WZB/AHD, dated 17-7-2007 in Appeal Nos. E/2914 & 3034/2003
Export Oriented Units, 100% EOU - DTA clearance, computation of entitlement - Deemed exports to another EOU for further use in manufacture and exports - Deemed exports to be treated on par with physical exports, hence DTA clearance made clearly within permissible limit as permitted. [2006 (196) E.L.T. 34 (Tribunal) followed]. [para 4.2]
Demand - Export Oriented Units, 100% EOU - DTA clearance - Raw material admittedly issued for manufacture in 100% EOU and not diverted - Goods sold into DTA with permission of Development Commissioner - Demand on raw material gone into manufacture of finished goods/rejects and wastes cleared in DTA not sustainable - Section 11A of Central Excise Act, 1944 - Section 28 of Customs Act, 1962. [para 4.3]
Asian Alloys Ltd. v. Commissioner — 2006 (203) E.L.T. 252 (Tribunal) — Distinguished [Paras 3, 5]
Amitex Silk Mills Pvt. Ltd. v. Commissioner — 2006 (196) E.L.T. 34 (Tribunal) — Followed [Para 4.2]
REPRESENTED BY : Dr. M.K. Rajak, SDR, for the Appellant.
Shri W. Christian, Advocate, for the Respondent.
[Order per : M. Veeraiyan, Member (T)]. - These appeals are filed by the Department against the orders of the Commissioner No. 29/Dem./2002 dt. 26/8/2002 & 30/Dem./2002 dt. 28-8-2002. The respondents in both the appeals are the same party.
2. We heard both sides.
3. The relevant facts, in brief, are as follows :-
(a) The respondent, a 100% EOU, imported duty free Texturised yarn/PFY in terms of Notification No. 53/97-Cus dt. 3-6-1997 and manufactured Twisted yarn and cleared them on deemed export basis to other 100% EOUs for their use.
(b) The periods involved in the appeals are Feb., 2000 to August, 2000 and Feb., 2001 to April, 2001.
(c) The Development Commissioner during the relevant period has permitted up to 50% of FOB value of exports to be cleared in the DTA area on payment of applicable duties.
(d) DTA clearances including rejects/wastes cleared in the domestic market where sought to be subject to duty without extending the benefit of Notification No. 2/95 and Notification No. 13/98 and show cause notices were issued accordingly demanding excise duty under Section 11A. Show cause notice also proposed recovery of duties of customs under Section 28 on the raw materials used in the finished products/rejects and wastes so sold.
(e) The Commissioner demanded the duty on the finished goods as proposed in the show cause notice but held that no customs duty on the duty free inputs used in the manufacture of such goods sold in the DTA will be applicable.
(f) The Departments is on appeal against non-demand of duty on the inputs which has gone into the finished products including wastes and rejects, which have been cleared into DTA with the permission of Development Commissioner.
3. The ld. DR relied on the decision in the case of M/s. Asian Alloys Limited v. C.C.E., Delhi-III [2006 (203) E.L.T. 252 (Tri.- Del.)].
4.1 The basic dispute arises on account of differing perception on the terms “exports”. There are two categories of exports namely, physical exports, which are physically exported out of the country and the deemed exports, which are supplies made to 100% EOUs as raw materials for further manufacture and the manufactured goods being ultimately exported. The Development Commissioner has granted permission for DTA sales upto 50% in terms of Exim Policy for the DTA sales treating deemed exports on par with the physical exports. The Revenue Department held that deemed exports cannot be equated with physicals exports and as DTA sales arrived at by them was in excess of the 50% (by taking only the physical exports into account) and hence demanded the duty.
4.2 This issue as to where the deemed exports has to be included for the purpose of determining entitlement in the DTA has been decided by the Tribunal in the case of the same respondent as reported in 2006 (196) E.L.T. 34 (Tri.-Del). Therefore, the clearances made by the respondent are clearly within the permissible limit of DTA sales as permitted by the Development Commissioner.
4.3 We find that the raw materials were admittedly issued for manufacture in the 100% EOU and no raw materials as such has been diverted and hence demand of duty on the raw materials is not sustainable. Therefore, we do not find any infirmity in the order of the Commissioner in not demanding the duty on the raw materials which have gone into manufacture of finished products/wastes and rejects, which have been sold in DTA with the permission of the Development Commissioner.
5. The reliance placed by the Department on the decision in the case of M/s. Asian Alloys Limited cited supra is misplaced. In that case, there is a finding that the unit has diverted the goods without taking necessary permission.
05 November 2015
2006 (196) E.L.T. 34 (Tri. - Mumbai)
IN THE CESTAT, WEST ZONAL BENCH, MUMBAI
[COURT NO. III]
Shri Krishna Kumar, Member (J) and Dr. Chittaranjan Satapathy, Member (T)
COMMISSIONER OF CENTRAL EXCISE, RAJKOT
RAVIRAJ PLASTICS PVT. LTD.
Order Nos. A/1811-1814/2005-WZB/MUM/C-III/EB, dated 12-12-2005 in Appeal Nos. E/2736-2739/2002
SSI Exemption - Brand name - Two units belonging to two brothers using same unregistered brand name - One of the units having been held to be the brand name owner, second unit using the same brand name not allowed small scale exemption. [para 3]
Demand - Limitation - Clear misdeclaration by units in classification list that brand name of another person not used - Extended period of limitation invocable in view of misdeclaration - Section 11A of Central Excise Act, 1944. [para 3]
DEPARTMENTAL CLARIFICATION CITED
C.B.E & C. Circular No. 52/52/94-CX., dated 1-9-1994............................................................. [Para 1]
REPRESENTED BY : Shri Hitesh Shah, SDR, for the Appellant.
Shri Paresh V. Seth, Advocate, for the Respondent.
[Order per : Chittaranjan Satapathy, Member (T)]. - Heard both sides. This is a case where two units belonging to two brothers have used the same unregistered brand name and have independently claimed small scale exemption. The learned Advocate for the respondents relies on the Board’s Circular 52/52/94-CX. dated 1-9-1994 and states that when the brand name is not owned by any particular person, another person using the same is entitled for availing the small scale exemption.
2. The learned SDR, on the other hand, argues that the Commissioner (Appeals) has come to the finding that one of the units is the owner of the brand name, though the same has not been registered. He further states that this finding of the lower appellate authority has not been challenged by the respondents either by filing an appeal or by filing a cross-objection. Hence, he argues that the second part of the lower appellate authority’s order allowing the second unit to avail the small scale exemption is self contradictory and not legal.
3. We find force in the submissions made by the learned SDR. Since the lower appellate authority has held one of the units as the owner of the brand name, the second unit using the same brand name cannot be allowed small scale exemption. The learned Advocate for the respondents states that the demand is also hit by limitation since the Range Officer was common for both the units and hence was aware that both units are using the same brand name. The learned SDR counters this argument stating that there is a clear misdeclaration by the units in the classification list that they are not using the brand name of another person. Hence, he claims that the demand is not hit by limitation. In view of the wrong misdeclaration made by the respondents to avail the small scale exemption, we are of the view that the demand cannot be assailed on the ground of time-bar and the extended period of time can be applied.
4. In view of our findings as above, we set aside that part of the impugned order under challenge before us and we remand the matter to the original authority to re-work out the duty and penalty based on our findings as above.
5. The department’s appeal is allowed by way of remand.