2019 (2) TMI 1296 – CESTAT CHENNAI – TMI – 100% EOU – Valuation – turbo charger components, machined castings, tools / jigs / fixtures – similar goods or not – bearing housing and turbine wheel assembly and components – concessional rate of duty under N/N. 23/2003-CE dated 31.3.2003 – DTA clearance – Held that:- On perusal of N/N. 23/2003-CE, it is found that there is no such conditionality that the goods are to be produced or manufactured wholly from the raw materials produced or manufactured in India. In fact, such requirement is found only in condition 3 which in any case is not sought to be availed by the appellant. This being so, this ground for denial of the benefit is not sustainable.
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Requirement of taking prior permission from jurisdictional Customs / Central Excise authority for DTA sale of goods – Circular 12/2005-Cus. dated 4.3.2005 – Held that:- The Circular states that EOUs are not required to take permission from the jurisdictional customs/central excise authority
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granted to appellant has not listed any specific components of a turbo charger but instead has only indicated export product as 12,50,000 nos. of turbo charger component which was even subsequently enhanced to 32,00,000 nos. of turbo charger components, the appellant cannot then be said to have caused a breach of the conditions.
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The impugned order in this regard cannot then sustain – appeal allowed – decided in favor of appellant. – Appeal No. E/265/2010 – Final Order No. 40319 / 2019 – Dated:- 19-2-2019 – Hon ble Shri Madhu Mohan Damodhar, Member (Technical) Shri S. Murugappan, Advocate for the Appellant Ms. T. Usha Devi, DC (AR) for the Respondent ORDER Per Bench The appellant is a 100% EOU with green card holder who are engaged in manufacture and export of turbo charger components, machined castings, tools / jigs / fixtures. Department took the view that bearing housing and turbine wheel assembly and components are not similar goods. In terms of Sl. No. 2 of Notification No. 2
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dly summarized as under:- 2.1 Condition No. 2 of Notification 23/2003 does not stipulate any requirement regarding manufacture by using only imported materials. Prior permission by Assistant Commissioner has been done away with as per Board s Circular No. 12/2005-Cus. dated 4.3.2005. Similar goods definition cannot be taken from Customs Valuation Rules for interpreting the provisions of Foreign Trade Policy (FTP). He relied on the following case laws:- a. Meghmani Industries Ltd. Vs. Commissioner of Central Excise, Ahmedabad – 2010 (261) ELT 411 (Tri. Ahmd.) b. Commissioner of Central Excise, Pune Vs. TELCO – 2000 (126) ELT 1102 (Tribunal). 2.2 The green card issued to the unit does not make any distinction within the various components of turbo charger. Total quantity is to be exported is given as 32,00,000 numbers. The expression similar has to be interpreted in the above context. 2.3 Even assuming but not admitting there is doubt regarding similar nature of the goods, DGFT / Develop
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using and turbine wheel are two distinct parts of the turbo charge; that function of bearing housing is completely different from that of turbine wheel and they are not also commercially interchangeable. Hence as per the clarification given by the Board, the turbine wheel and bearing housing cannot be called as similar goods and thus the appellant is not eligible to avail concessional duty in respect of clearances of turbine wheel to DTA. The ld. AR also submitted that the legislation intent was to allow similar goods to be sold in DTA that were exported. 4. Heard both sides. 5.1 We find that the show cause notice was issued on the following grounds:- a. The benefit of concessional duty under Notification 23/2003-CE was available if the goods cleared are made by using indigenous materials. Hence when both indigenous and imported raw materials were used the benefit cannot be claimed. b. Appellants are exporting bearing housing whereas they had cleared turbine wheel assembly in the DTA.
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2004-2009 dated 24th January of the Department of Commerce prescribes DTA Sale of finished products as per para 6.8(a) by eligible EOUs shall not require permission of Development Commissioner or Jurisdictional Deputy/Assistant Commissioner of Customs/Central Excise and instead unit shall be required to send prior intimation. (ii) In this respect your attention is invited to Circular No. 88/98-Cus Dated 2.12.98 whereby it has been decided that sale into DTA can be made by the manufacture himself subject to his recording of each transaction in the records prescribed by the Board/Commissioners or their private records approved by the commissioners. Further, Rule 17 of the Central Excise Rules, 2002 provides that EOU can clear the goods on payment of duty. Therefore EOUs are not required to take permission from the jurisdictional customs/central excise authority for DTA sale of goods. The units may sell the goods on payment of duty as per the conditions and entitlements as specified in Fo
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on of similar goods would be based on the definition of similar goods as provided in the Customs Valuation (Determination of Pride of Imported Goods) Rules, 1988. The relevant portion of the Board s clarification is under:- The term 'similar goods" means "goods which is although not alike in all respects, have like characteristics and like component materials which enable them to perform the same functions and to be commercially interchangeable with the goods which have been exported or expected to be exported having regard to the quality, reputation and the existence of trade mark and produced in the same unit by the same person who produced the export goods" 5.5 In the first place, we find that the Tribunal in the case of Meghmani Industries Ltd. (supra) has addressed the very controversy in respect of the definition of similar goods for exemption under Notification 23/2003-CE. The Tribunal in the decision after referring to the judgment of the Hon ble Supreme Cour
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onents which is the export product as per the EOU/green card issued to the appellant by the Development Commissioner. Hence when the permission granted to appellant has not listed any specific components of a turbo charger but instead has only indicated export product as 12,50,000 nos. of turbo charger component which was even subsequently enhanced to 32,00,000 nos. of turbo charger components, the appellant cannot then be said to have caused a breach of the conditions. Both bearing housing and turbine wheel are surely component parts of turbo charger, a fact which has been admitted by the adjudicating authority in para 12 of the impugned order. If on the other hand, the permission granted by the Development Commissioner to the EOU was only for bearing housing, in that event, the clearance of turbine wheel which is a part distinct from bearing housing would have come under the scanner. But when the permission is generic and only states turbo charger components , the condition of the im
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