SURESH SYNTHETICS Vs. COMMISSIONER OF CENTRAL EXCISE, SURAT

JUDGEMENT

(1.) THE facts of the case, in brief, are as follows : The appellant is a 100% EOU engaged in the manufacture of polyester texturised/twisted yarn falling under Chapter 54 of Central Excise Tariff Act, 1985. On scrutiny of records for the period from April, 2002 to May, 2002, it was noticed that the unit had cleared polyester textured yarn valued at Rs. 32,00,357/ - to the holders of Advance Release Orders and paid Central Excise duty amounting to Rs. 1,30,362/ - (Rupees One Lakh, Thirty Thousand, Three Hundred and Sixty Two Only) in terms of Notification No. 28/2001 -C.E. However, as per Notification No. 28/2001 -C.E., dated 16 -5 -2001 read with Para 4.2 of Export Import Policy 2002 -2007, they were required to pay the additional duties of Customs i.e. CVD amounting to Rs. 11,77,730/ - (Rs. Eleven Lakhs, Seventy Seven Thousand, Seven Hundred and Thirty Only) because the appellant is not an independent texturiser and since being an EOU, the benefit of Notification No. 6/2002 -C.E., dated 1 -3 -2002 cannot be given to the party and the differential duty amounting to Rs. 10,47,370/ - (Rupees Ten Lakhs, Forty Seven Thousand, Three Hundred and Seventy Only) is required to be paid. Hence, a Show Cause Notice was issued to them.

(2.) DURING the course of adjudication, the appellant raised various pleas and contentions as regards availability of exemption in terms of Notification No. 28/2001 -C.E., dated 16 -5 -2001. In the alternative, they claimed the benefit of Notification No. 125/84 -C.E., dated 26 -5 -1984 in terms of which all excisable goods produced or manufactured by a 100% EOU are exempt from whole of duty of Excise leviable thereon under Section 3 of Central Excise Act, 1944 provided that these are not the goods allowed to be sold in India.

(3.) THE adjudicating authority, however, denied the benefit of said notification on the ground that the argument put forth by the noticeee that the clearances against DFRC licences are not the clearances under the permitted DTA quota by Development Commissioner or the said goods are not allowed to be sold in India, is not maintainable. He also observed that the said Notification No. 125/84 -C.E., dated 26 -5 -1984 was rescinded w.e.f. 1 -7 -1988 and inasmuch as the period covered in the present case is 2002, the benefit of said notification cannot be extended to them.