CA Bimal Jain
Sahajanand Technologies Pvt. Ltd (the Respondent) being a 100% EOU made DTA sales by supplying goods to the EPCG licence holder, DTA sales. In terms of the Section 3 of Excise Act, such sales were liable for the payment of Excise duty equal to the amount of Customs duty leviable in terms of Section 12 of the Custom Act. Vide Customs Exemption Notifications, goods supplied to EPCG license holders were eligible for partial/full exemption from Customs duty. The Assessee claimed said Customs exemptions in computing ‘Excise duty equal to Customs duty’ on DTA clearances.
The Department alleged that since the Respondent was liable for payment of Excise duty, Customs exemptions would not apply. Further, as per Section 5A of the Excise Act, Excise exemptions would apply only if specially provided in Notification itself.
The Hon’ble Apex Court upheld the Order of the Tribunal, wherein it was held that:
Hence, EPCG exemptions under Customs law would apply to goods cleared by 100% EOUs.
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