INDOWORTH INDIA LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) The issue regarding the manner to computing the "amount of duty calculated at the rate of 50% of each of the duties of customs" under Notification No. 2/95 -C.E., dated 4 -1 -1995 is referred to the Larger Bench in view of the conflicting decisions of the Tribunal in the case of Futura Polymers Ltd. v. Commissioner of Central Excise, Chennai, reported in 2003 (152) E.L.T. 156 (Tri. - Del.) and in the case of Uniworth Textiles Ltd. v. Commissioner of Customs and Central Excise, Nagpur, reported in 2003 (157) E.L.T. 669 (Tri. -Mumbai).

(2.) The period in dispute is prior to the amendment made in the Notification No. 2/95 -C.E., dated 4 -1 -1995 by Notification No. 11/2002 -C.E., dated 1 -3 -2002. In the case of Futura Polymers Ltd. v. Commissioner of Central Excise, Chennai (supra), the Tribunal held that as per the provisions of Notification No. 2/95 -C.E., dated 4 -1 -1995, the amount of duty is to be calculated at the rate of 50% of each of the duties of customs. In the case of Uniworth Textiles Ltd. v. Commissioner of Customs & Central Excise, Nagpur (supra), the Tribunal after taking into consideration the Central Board of Excise & Customs, New Delhi Circular No. 7/2001 -Cus., dated 6 -2 -2001 held that the amount of duties is to be calculated equivalent to 50% of aggregate of duties of customs.

(3.) The contention of the appellants is that during the period in question, the Notification No. 2/95 -C.E., dated 4 -1 -1995 exempts the goods cleared to Domestic Tariff Area (DTA) by 100% EOU from so much the duties of excise leviable thereon under Section 3 of the Act as is in excess of amount calculated at the rate of 50% of each of duties of customs. The Central Board of Excise and Customs, Circular F. No. 512/91/93 -Cus.VI, dated 18 -5 -1994 and Circular F. No. 345/12/99 -TRU, dated 24 -9 -1999 provides the method of computation of duty to be paid by 100% EOU on the goods manufactured by them and cleared to DTA. The contention is that by Circular No. 7/2001 -Cus., dated 6 -2 -2001, the Board revised its method of computation of duty without amending the Notification. By applying this Circular the duty was demanded on the basis of aggregate of duties of customs. The Notification No. 2/95 -C.E., dated 4 -1 -1995 was further amended by Notification No. 11/2002, dated 1 -3 -2002 and it was specifically provided in the notification that the exemption to DTA sales by 100% EOU in excess of amount equivalent to 50% of aggregate of the duties of customs. The contention is that after this amendment, the Revenue is entitled to compute the amount of duty equivalent to 50% of aggregate of the duties of Customs. The contention is that prior to the amendment of the Notification No. 2/95 -C.E., dated 4 -1 -1995, with effect from 1 -3 -2002, the Revenue can only calculate the rate of amount of duty at the rate of 50% of each of duties of customs.