M/S. Gem Granites vs Cce, Chennai-Iv

(Arising out of Order-in-Appeal No. 18/2014 (M-IV) dated 11.02.2014, passed by the Commissioner of Central Excise (Appeals), Chennai).

M/s. Gem Granites : Appellant

Vs.

CCE, Chennai-IV : Respondent

Appearance

Shri Raghavan Ramabhadran, Adv., For the applicant

Ms. Indira Sisupal, AC (AR) For the respondent

CORAM

Honble Shri R. PERIASAMI, Technical Member Honble Shri P.K. CHOUDHARY, Judicial Member

FINAL ORDER No. 40554 / 2015

Date of Hearing/Decision: 12.05.2015

Per: R. Periasami

Since the issue involved is in narrow compass, after dispensing the stay application, the main appeal itself is taken up for disposal with the consent of both sides.

2. In the appellants own case on identical issue the Tribunal vide Final Order No.470/2007 dated 0105.2007 allowed the appeal on DTA clearance under Notification No. 23/2003-CE dated 31.03.2003 (Sl.No. 3 read with condition No. 3) for the period November,04 to October,05. In the present case, the demand covers July, 2004 to November, 2008.

3. Ld. Advocate submits that the Tribunals order attained finality since no appeal has been filed by Revenue. He further submits that in the present case the only difference is both in the show cause notice, in OIO and in the impugned order the duty has been demanded under 22/2003-CE dated 31.03.2003 (illustration S.No.2).

4. After hearing both sides and on perusal of the exemption notification No. 23/03 and 22/03, we find that the appellants being EOU for clearance of DTA covered under para 6.8 of the policy as per Notification No. 23/03 under Sl. No. 3 read with condition No.3. Whereas, the main allegation in the SCN, in that the duty has been demanded under Notification No. 22/03. (Sl.No.2) and demand also confirmed under Notification No. 22/03 (read with illustration). On perusal of Notification 22/03, preamble reads as under:-

EOU/STP/EHTP Units  Exemption to goods brought into  Notification Nos. 136/94-C.E., 1/95-C.E., 10/95-C.E., 37/99-C.E. and 37/2000-C.E. rescinded In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), read with sub-section (3) of section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957) and sub-section (3) of section 3 of Additional Duties of Excise (Textile and Textile Articles) Act, 1978 (40 of 1978), the Central Government being satisfied, that it is necessary in the public interest so to do, hereby exempts, -

(a) all goods specified in Annexure-I to this notification, when brought in connection with, -

(i) manufacture and packaging of articles or for production or packaging or job work for export of goods or services, into export oriented undertakings (hereinafter referred to as the user industry) other than those units referred to in clauses (b) to (c);

(ii) manufacture or development of software, data entry and conversion, data processing, data analysis, control data management or call center services for export, into Software Technology Park (STP) Unit or a unit in Software Technology Park Complex under the hundred percent export oriented scheme (hereinafter referred to as the user industry ); or

(iii) the manufacture or development of electronics hardware or electronic hardware and software in an integrated manner for export, into Electronics Hardware Technology Park (EHTP) unit or a unit in an Electronic Hardware Technology Park Complex (EHTP) under the hundred percent. export oriented Scheme (hereinafter referred to as the user industry); or

(b) all goods specified in Annexure II to this notification, when brought in connection with production, manufacture or packaging of goods as specified in Annexure-III for export, into export oriented undertaking in horticulture, agriculture and animal husbandry sector (hereinafter referred to as the user industry); or

(c) all goods specified in Annexure IV to this notification, when brought in connection with production, manufacture or packaging of aquaculture products for export, into export oriented undertaking in aquaculture sector (hereinafter referred to as the user industry); or

(d) all goods specified in Annexure V to this notification, when brought in connection with quarrying of granite by export oriented undertaking engaged in processing and manufacture or production of articles of granite for export (hereinafter referred to as the user industry),

It is evident from the above notification that the said notification exempt the goods when brought in connection with manufacture and packaging or production into EOU, it relates to the procurement of inputs, raw materials and capital goods for manufacture of finished goods by the EOU. Therefore, notification referred both in the show cause notice and in the impugned order not related to EOU clearance of finished goods into DTA market and not relevant to the payment of duty on the goods cleared by EOU to DTA. Further the issue on merits has already been decided by the Tribunal in Final Order No. 470/2007 dated 01.05.2007 in the appellants own case referred above, the relevant portion of the said order is reproduced as under:-

3.?After hearing both sides and considering their submissions, we find that, on a similar set of facts, the Tribunals co-ordinate Bench at Bangalore held, in the case of certain other EOUs, that the epoxy resins used by the EOUs in the manufacture of granite slabs out of indigenously procured granite blocks were not to be considered as raw material but only as consumables and, accordingly, the Bench allowed the benefit of Notification No. 8/97-C.E. dated 1-3-97 (predecessor to Notification No. 23/03-C.E.) to the EOUs vide Final Order Nos. 404-407/2007, dated 27-3-2007 in Appeal No. C/150/2006 etc. We find that, in the said final order, the Bench considered Notification No. 23/03-C.E. as well. It also took into account the Development Commissioners clarification which was to the effect that the resins used by EOUs in the polishing of granite blocks were only consumables. We are in full agreement with the view taken by the co-ordinate Bench. Accordingly, it is held that the appellants did not use any imported raw material in the manufacture of polished granite slabs during the material period and hence were eligible for the benefit of concessional rate of duty under Notification No. 23/03-C.E. ibid. The demand of duty is not sustainable. The impugned order is set aside and the appeal is allowed. In view of the above decision on merits, we set aside the impugned order and allow the appeal.

(Order dictated and pronounced in the open Court)

(P.K. CHOUDHARY) (R. PERIASAMI) JUDICIAL MEMBER TECHNICAL MEMBER

BB

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