HIMALYA INTERNATIONAL LTD. Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) The issue that has come up for consideration before the Larger Bench relates to the rate of duty applicable to goods which are cleared from an hundred per cent EOU to DTA in excess of the permission of Development Commissioner. In Kuntal Granites (P) Ltd. v. CCE, Belgaum - 2001 (132) E.L.T. 214 Bangalore Bench of this Tribunal has taken the view that in cases where goods are cleared to DTA by an EOU without the same being allowed by Development Commissioner the duty applicable would be in terms of Section 3(1) of the Central Excise Act, 1944, that is to say, the rate of duty payable by a non -EOU manufacturer in respect of sales for domestic consumption. The correctness of the above view is doubted by the referring Bench. The Bench felt that such an interpretation would create an anomalous situation where an EOU would pay a higher rate of duty in respect of supplies made to DTA with the permission of Development Commissioner and a lesser rate of duty in respect of goods sold in excess of the permission for clearance to DTA. It was under these circumstances the issue has come up for consideration before a Larger Bench.

(2.) The relevant statutory provision reads as follows : -

(3.) The learned DR would contend that the interpretation sought to be given on the proviso to Section 3(1) by the appellant would defeat the very purpose of the proviso, namely to carve out a separate category of excisable goods produced or manufactured by a 100% EOU and sold in DTA. In support of her contention that no interpretation which would have the effect of defeating the very statutory provision shall be given. She relies on British Airways PLC v. Union of India - 2002 (139) E.L.T. 6 (S.C). The learned DR would further contend that the decision of the Supreme Court in SIV Industries Ltd. is not an authority on the issue concerned. It is also submitted that the circular dated 13 -2 -2002 has been issued wrongly understanding the above decision of the Supreme Court. So also the Kuntal Granites is not good law for the same reason.