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CUSTOMS, EXCISE AND GOLD (CONTROL) APPELLATE TRIBUNAL, NEW DELHI
Mrs. K.K. Usha, C.N.B. Nair, P.G. CHACKO, JJ.
Himalya International Ltd. -Appellant
Versus
Commissioner of Central Excise, Chandigarh-I -Respondent
Misc. Order No. 101/2003-NB(A) Appeal No. E/1590/2002-NB(A) C/405-406/2002-NB(A), 101 of 2003, 1590 of 2002, 405 of 2002, 406 of 2002
Decided On : 22-05-2003
Per Justice K.K. Usha : The issue that has come up for consideration before the Larger Bench [referral order reported in 2002 (52) RLT 543 (CEGAT-Del.)] relates to the rate of duty applicable to goods which are cleared from an hundred percent EOU to DTA in excess of the permission of Development Commissioner. In Kuntal Granites (P) Ltd. Vs. CCE, Belgaum 2001 (43) RLT 829=2001 (132) ELT 214 Bangalore Bench of this Tribunal has taken the view that in cases where goods are cleared to DTA by an EOU without the same being allowed by Development Commissioner the duty applicable would be in terms of Section 3(1) of the Central Excise Act, 1944, that is to say, the rate of duty payable by a non-EOU manufacturer in respect of sales for domestic consumption. The correctness of the above view is doubted by the referring Bench. The Bench felt that such an interpretation would create an anomalous situation where an EOU would pay a higher rate of duty in respect of supplies made to DTA with the permission of Development Commissioner and a lesser rate of duty in respect of goods sold in excess of the permission for clearance to DTA. It was under these circumstances the issue has come up for consideration before a Larger Bench.
2. The relevant statutory provision reads as follows:-
"SECTION 3. Duties specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 to be levied - (1) There shall be levied and collected in such manner as may be prescribed,-
(a) a duty of excise on all excisable goods which are produced or manufactured in India as, and at the rates, set forth in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986);
(b a special duty of excise, in addition to the duty of excise specified in clause (a) above, on excisable goods specified in the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) which are produced or manufactured in India, as, and at the rates, set forth in the said Second Schedule.
Provided that the duties of excise which shall be levied and collected on any exciseable goods which are produced or manufactured,-
(i) in a free trade zone and brought to any other place in India; or
(ii) by a hundred per cent export-oriented undertaking and allowed to be sold in India,
Shall be an amount equal to the aggregate of the duties of customs which would be leviable under section 12 of the Customs Act, 1962 (52 of 1962), on like goods produced or manufactured outside India if imported into India, and where the said duties of customs are chargeable by reference to their value; the value of such excisable goods shall, notwithstanding anything contained in any other provision of this Act, be determined in accordance with the provisions of the Customs Act, 1962 (52 of 1962) and the Customs Tariff Act, 1975 (51 of 1975)."
It is the case of the assessee which is an hundred per cent EOU, that for assessing the goods to duty under proviso to Section 3(1) two conditions have to be satisfied, namely, (a) that the goods should have been produced or manufactured by a 100% EOU and (b) that the goods should have been allowed to be sold in India. If the goods are sold by an hundred per cent EOU in DTA in excess of permission of the Development Commissioner as is the allegation in the present case, the assessment has to be under the main provision of Section 3(1). In support of the above contention, the learned counsel for the assessee placed reliance on the decision of Supreme Court in SIV Industries Ltd. Vs. CCE & Customs 2000 (37) RLT 583 (SC)=2001 (117) ELT 281 (SC) and that of the Tribunal in Kuntal Granites (P) Ltd. Vs. CCE, Belgaum 2001 (43) RLT 829=2001 (132) ELT 214. Reliance is also placed on Circular No. 618/9/2002-CX. dated 13.2.2002 [reported in 2002 (48) RLT M143] issued by Central Board of Excise & Customs.
3. Learned the DR would contend that the interpretation sought to be given on the proviso to Section 3(1) by the appellant would defeat the very purpose of the provi
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