Yangir Synthetics Vs. Commissioner of Central Excise - Court Judgment

Excerpt:
1. the appellants are 100% e.o.u. engaged in the manufacture of texturised/crimped polyester yarn. they were permitted to make clearance to the domestic tariff area. while clearing the goods the average assessable value came to rs. 57/- per kg. as declared in the bill of entry. however, it was noticed by the department that the clearance were taken at the rate prescribed under notification no.101/93 dated 27.12.1993 and proviso to this notification stipulated that the amount of duty payable in accordance with this notification in respect of the said goods shall not be less than the duty of the excise leviable on the like goods produced or manufactured outside the 100% e.o.u.2. it was further noticed that under notification no. 32/94 tariff value under section 3 of the central excise & salt act, 1944 was fixed at rs. 105/- per kg. in respect of polyester filament texturised yarn.in view of this the assessee wore required to pay the differential duty of rs. 14,49,718.96 which was confirmed by the commissioner (appeal).3. none appeared for the appellant inspite of the notice. we therefore heard the j.d.r. and perused the record.4. the learned j.d.r. supported the findings of the commissioner. the appellant in their appeal have stated that they being in 100% e.o.u were subject to the payment of duty at rates prescribed under section 12 of the customs act, 1962 and thus the assessable value had to be taken in accordance with the provisions of the customs act, 1962.5. their specific situation was covered by the proviso to section 3 relating to payment of the duty and determination of the assessable value, which in turn was specific law relating to clearances made from 100% export oriented unit. besides being entitled to precedence and prevalence over a general provision like sub-section 2 of section 3 due to the fact that it was a specific law the proviso was also specifically couched with a non-obstante clause which would fully, nay.exclusively cover the situation in the instant case. when the valuation was done in accordance with section 14 of the customs act, rs. 57/- would be the assessable value as per the law and they have inadvertently paid the cvd on the tariff value of rs. 105/- per kg. for which they will be entitled to a refund.6. the duty of customs paid by the appellants was not less than the duties of the excise leviable under the provisions of central excise & salt act, 1944 and thus there was no short payment in terms of proviso to notification no. 101/93. the department reliance on notification 32/94 for valuation is misplaced as appellant is exclusively governed by the customs tariff act. in view of this no duty can be demanded from them and order should be set aside.7. we have considered the submission. we find that as per section 3 of the central excise act, the duty leviable in respect of the clearance effected by 100% e.o.u shall be an amount equal to the aggregate of the duties of the customs which would be leviable under section 12(a) of the customs act, 1962 on like goods produced and manufactured outside india if imported into india and where the said duty of the custom are chargeable by reference to their value, the value of said excisable goods shall notwithstanding anything contained in any other provisions of this act, be determined in accordance with the provisions of the customs act, 1962. however, notification no. 101/93 dated 27-12-93 provide partial exemption and reduced the duty leviable thereon as is in excess of 50% of the duty of the custom which would be leviable under section 12 of the custom act, read with other notification for the time being in force. however, second proviso to notification provides that the amount of duty payable in accordance with this notification in respect of the said goods shall not be less than the duty of excise leviable on the like goods produced or manufactured outside the 100% export oriented unit.8. therefore in order to satisfy the conditions prescribed under the proviso to the notification, it was necessary to determine the duty of excise leviable on the like goods produced or manufactured in unit other than 100% e.o.u. since for the purpose of calculating duty the tariff value was fixed in respect of domestic unit, it was necessary to take into account the tariff value and for this purpose the tariff value was taken into account. this is what has been done by the commissioner and therefore we do not find any infirmity in the order.once the appellants seek benefit of a notification they have to comply with all its condition and cannot be allowed to take only the beneficial parts and leave that which is not beneficial to him.9. we therefore reject the appeal and uphold the order of the commissioner.

Judgment:
1. The appellants are 100% E.O.U. engaged in the manufacture of texturised/crimped Polyester yarn. They were permitted to make clearance to the domestic tariff area. While clearing the goods the average assessable value came to Rs. 57/- per kg. as declared in the bill of entry. However, it was noticed by the department that the clearance were taken at the rate prescribed under notification No.101/93 dated 27.12.1993 and proviso to this notification stipulated that the amount of duty payable in accordance with this notification in respect of the said goods shall not be less than the duty of the excise leviable on the like goods produced or manufactured outside the 100% E.O.U.2. It was further noticed that under notification No. 32/94 tariff value under Section 3 of the Central Excise & Salt Act, 1944 was fixed at Rs. 105/- per kg. in respect of Polyester Filament Texturised Yarn.

In view of this the assessee wore required to pay the differential duty of Rs. 14,49,718.96 which was confirmed by the Commissioner (Appeal).

3. None appeared for the appellant inspite of the notice. We therefore heard the J.D.R. and perused the record.

4. The Learned J.D.R. supported the findings of the Commissioner. The appellant in their appeal have stated that they being in 100% E.O.U were subject to the payment of duty at rates prescribed under Section 12 of the Customs Act, 1962 and thus the assessable value had to be taken in accordance with the provisions of the Customs Act, 1962.

5. Their specific situation was covered by the proviso to Section 3 relating to payment of the duty and determination of the assessable value, which in turn was specific law relating to clearances made from 100% export oriented unit. Besides being entitled to precedence and prevalence over a general provision like Sub-section 2 of Section 3 due to the fact that it was a specific law the proviso was also specifically couched with a non-obstante clause which would fully, nay.

exclusively cover the situation in the instant case. When the valuation was done in accordance with Section 14 of the Customs Act, Rs. 57/- would be the assessable value as per the law and they have inadvertently paid the CVD on the tariff value of Rs. 105/- per kg. for which they will be entitled to a refund.

6. The duty of customs paid by the appellants was not less than the duties of the excise leviable under the provisions of Central Excise & Salt Act, 1944 and thus there was no short payment in terms of proviso to notification No. 101/93. The department reliance on Notification 32/94 for valuation is misplaced as appellant is exclusively governed by the Customs Tariff Act. In view of this no duty can be demanded from them and order should be set aside.

7. We have considered the submission. We find that as per Section 3 of the Central Excise Act, the duty leviable in respect of the clearance effected by 100% E.O.U shall be an amount equal to the aggregate of the duties of the customs which would be leviable under Section 12(A) of the Customs Act, 1962 on like goods produced and manufactured outside India if imported into India and where the said duty of the custom are chargeable by reference to their value, the value of said excisable goods shall notwithstanding anything contained in any other provisions of this Act, be determined in accordance with the provisions of the Customs Act, 1962. However, notification No. 101/93 dated 27-12-93 provide partial exemption and reduced the duty leviable thereon as is in excess of 50% of the duty of the custom which would be leviable under Section 12 of the Custom Act, read with other notification for the time being in force. However, second proviso to notification provides that the amount of duty payable in accordance with this notification in respect of the said goods shall not be less than the duty of excise leviable on the like goods produced or manufactured outside the 100% Export Oriented Unit.

8. Therefore in order to satisfy the conditions prescribed under the proviso to the notification, it was necessary to determine the duty of excise leviable on the like goods produced or manufactured in unit other than 100% E.O.U. Since for the purpose of calculating duty the tariff value was fixed in respect of domestic unit, it was necessary to take into account the tariff value and for this purpose the tariff value was taken into account. This is what has been done by the Commissioner and therefore we do not find any infirmity in the order.

Once the appellants seek benefit of a notification they have to comply with all its condition and cannot be allowed to take only the beneficial parts and leave that which is not beneficial to him.

9. We therefore reject the appeal and uphold the order of the Commissioner.