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Case Law Details

Case Name : Matrix Laboratories Ltd Vs Commissioner of Central Tax (CESTAT Hyderabad)
Appeal Number : Excise Appeal No. 1389 of 2011
Date of Judgement/Order : 09/06/2023
Related Assessment Year :
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Matrix Laboratories Ltd Vs Commissioner of Central Tax (CESTAT Hyderabad)

CESTAT Hyderabad held that when EOU procures inputs by availing benefit of notification no. 52/2003-CUS, while clearing such inputs to DTA, EOU is required to pay duty only by way of cash.

Facts- The Appellant is manufacturer of various pharma products and is registered as 100% EOU. For the raw materials imported by them, they are availing the benefit of Notification No. 52/2003-CUS dt.31.03.2003 wherein Customs Duty concessions are available to them. Similarly, in respect of indigenously procured raw materials, consumables etc., they are availing the exemption provided under Notification No. 22/2003-CE dt.31.03.2003.

The Department issued Show Cause Notice for the period April, 2005 to September, 2005 involving the extended period and for the normal period October, 2009 to March, 2010 on the ground that when such duty free inputs are cleared from EOU to DTA, the Duty is required to be discharged by way of cash payment, by way of debit in the PLA Account whereas the Appellants have utilized the Cenvat credit which is not legal and proper. After due process, the demands were confirmed. Being aggrieved by the impugned Orders, the Appellants are before the Tribunal.

Conclusion- Held that it emerges that if the raw materials/ inputs cleared pertain to procuring the inputs by getting the benefit of Notification No. 52/2003-CUS dt.31.03.2003, the EOU is required to pay the duty only by way of cash and Cenvat credit cannot be utilized since the inputs were imported by claiming Customs Duty exemption.

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