Case Law Details
HCL Technologies Ltd. Vs Commissioner of GST & Central Excise (CESTAT Chennai)
CESTAT Chennai held that benefit of exemption in terms of section 5A vide notification no. 10/1997-CE dated 1.03.1997 duly extended to EOU.
Facts- The appellant is an 100% EOU and also holds a private bonded warehouse license u/s. 58 of the Customs Act, 1962 for manufacture of electrical, electronics and communication equipments falling under Chapter 84, 85 and 90 of the First Schedule to the CETA, 1985.
On perusal of the ER-2 returns, it appeared that the appellant had claimed benefit of Notification No.10/97-CE dated 1.3.1997 in respect of clearance of one unit of Test Equipment in GSM Bands valued at Rs.4,04,87,748/- without payment of duty. The clearance of finished goods into the DTA by an 100% EOU is covered by Para 6.8 and 6.9 of Foreign Trade Policy 2009 – 2014 subject to fulfilment of certain obligations and also observance of Customs and Central Excise formalities including duty demand etc. The department was of the view that the said exemption Notification No. 10/1997 dated 1.3.1997 has been issued under sub-section (1) of Section 5A. There is nothing contained in the exemption notification making it applicable to 100% EOU and therefore the appellant is not eligible to claim the benefit of duty exemption as per the Notification.
Conclusion- The Tribunal in the case of CCE, Hyderabad Vs. Shanta Biotechnics Ltd. has held that the duty payable shall be determined in exactly the same manner as is done in respect of imported goods. This implies that for determining the duties of excise under proviso to section 3(1) of the Central Excise Act, 1944 on the goods cleared to the DTA by the EOUs, the exemption under the relevant Customs Notifications and Excise Notifications, if any, have to be provided. Therefore, I am of the view that the assessee is liable to pay only the effective rate of Additional Duty of Customs under section 3(1) of the Customs Tariff Act on clearances of the goods into the DTA.
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