RATANGIRI TEXTILES LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) Both the appellants are 100% EOUs. Being so, their clearances to Domestic Tariff Area (DTA) are liable to duty in terms of proviso to Section 3 (1) of the Central Excise Act. The effect of this is that duty payable on the goods cleared by these units would be the aggregate customs duty leviable on similar goods when imported into India.

(2.) In the present cases, dispute has arisen as to what is the rate at which additional duty of customs (CVD) is to be levied on the goods cleared by the appellant's EOU to the Domestic Tariff Area. The appellants contended before the lower authorities that rate of duty applicable would be the effective rate of duty as fixed under exemption notification and not tariff rates of duty. The lower authorities held to the contrary, based on proviso to Section 5A of the Central Excise Act. This finding is challenged in the present appeals.

(3.) The appellants contend that it is well settled that additional duty of Customs (CVD) is to be levied at effective rates and not at Tariff Rates. They rely on the decision of the Hon'ble Gujarat High Court in the case of Varsha Exports and Ors. v. UOI and Ors. - 2000 (40) RLT 9 (Guj) and letter F. No. 305/113/94 -FTT, dated 19th February, 1998 of the Central Board of Excise and Customs.