CA Bimal Jain
In the instant case, Bhimli Unit of Alsa Marine And Harvests Ltd. (the Respondent) is a 100 % Export Oriented Undertaking (EOU) engaged in the process of freezing and export of marine products as per the permission accorded
by the Department of Industrial Development. The Respondent imported goods without payment of Customs duty and procured indigenous goods without payment of Central Excise duty seeking exemption under Notification No. 13/81 dated February 9, 1981 and Notification No. 123/81 dated June 2, 1981 respectively. Departmental investigation revealed that during 1994-1996 the Respondent cleared goods with total value of Rs. 43,47,97,371/- to their Chennai Unit for further exporting. Accordingly, it was alleged that the Respondent have cleared the goods to the Domestic Tariff Area (“DTA”) on which duty of Rs. 4,34,79,737/- was payable. Accordingly SCN dated December 12, 1997 was issued which was further confirmed by the Ld. Commissioner.
Being aggrieved, the Respondent preferred an appeal before the Hon’ble Tribunal, where the appeal was allowed in favour of the Respondent and interalia it was held that since Chapter V-A of the erstwhile Central Excise Rules, 1944 applies to removal from an EOU unit, hence confiscation and penalty under erstwhile Rule 173Q thereof is set aside. Further, the goods manufactured and removed from the EOU have been admittedly exported out of India and therefore, there cannot be any duty leviable under the Customs Act and /or the Excise Act. Being aggrieved the Department preferred an appeal before the Hon’ble Supreme Court.
The Hon’ble Supreme Court held as under:
Thus, the Hon’ble Supreme Court allowed the appeal in favour of the Respondent and held that the Respondent, which is an EOU, had fulfilled its legal obligation of exporting the manufactured goods.
(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email: firstname.lastname@example.org)