Abhishek Exports Vs Commissioner of Customs (CESTAT Delhi)
The appeals were filed by three 100% Export Oriented Units (EOUs) challenging orders of the Commissioner of Customs, Jodhpur confirming customs duty demands, interest, penalties under Section 114A of the Customs Act, and redemption fines. The appellants manufactured marble slabs and tiles under the Foreign Trade Policy (FTP) 2004–2009 and were permitted to import capital goods and raw materials duty free. A DGFT notification dated 31.08.2005 excluded marble from the list of items that EOUs could sell in the Domestic Tariff Area (DTA). The appellants challenged the notification before the Rajasthan High Court, which granted interim orders permitting DTA sales of marble products subject to payment of full duties under paragraph 6.8 of the FTP. The appellants cleared marble slabs into DTA after paying central excise duty equal to the customs duties payable under the proviso to Section 3 of the Central Excise Act, 1944.
Following the Supreme Court’s decision upholding the DGFT notification and disposal of the writ petitions, the Department issued show cause notices alleging that duty-free imported marble blocks had been used to manufacture goods sold in DTA instead of being exported, contrary to the FTP and Notification No. 52/2003-Cus. The Commissioner confirmed the demands, leading to the present appeals.
