GENERAL OPTICS (ASIA) LTD. Vs. CCE

JUDGEMENT

(1.) For the purpose of hearing this appeal, the applicants are required to pre -deposit a duty amount of Rs. 1,51,13,735/ - demanded in terms of Section 11A of the CE Act, 1944 and a penalty of Rs. 15,00,000/ - in terms of the impugned order in Original No. 10/2003 dated 20.06.2003 passed by the commissioner.

(2.) Proceedings were initiated against the applicants by issue of two show cause notice No. dated 4.1.2002 demanding a duty of Rs. 53,07,894 for the period from 1/2001 to 3/2001 and another show cause notice dated 2.4.2002 demanding duty of Rs. 98,05,841/ - for the period from 4/2001 to 12/2001 on the following allegations :

(3.) Shri R. Raghavan, learned Counsel appearing for the applicants submitted that the issue in the appeal relates to clearances made to DTA. He submitted that the appellants are a 100% EOU and they supply the goods to Defence Department and ISRO etc. They are eligible to the benefit of Notification No. 51/96 -Cus dated : 23.7.96. They have also claimed exemption in terms of Notification No. 2/95 -CE dated 4.1.95. He has further submitted that in the present case the Development Commissioner had issued permission for clearance to DTA to the tune of Rs. 178.72 lakhs and as against that permission the they have made actual clearances to the tune of Rs. 81.29 lakhs only for the period 1/2001 to 3/2001 and therefore, their clearances is in terms of the valid permissions granted by the Development Commissioner (EPZ) and in terms of the EXIM Policy 1997 -2002, it is the Development Commissioner who is to determine the DTA eligibility. Likewise, the clearances made to DTA during the period from 4/2001 to 12/2001 were to the tune of Rs 58.45 lakhs as against the permitted clearance by Development Commissioner to the tune of Rs. 265.57 lakhs. His further contention was that exemption is simultaneously available under two different Notifications. He has also submitted, being EOU, their clearance to DTA are liable to duty in terms of the proviso to Section 3(1) of the CE Act, 1944 and hence the duty on the goods cleared by them would be the aggregate of customs duty leviable on similar goods when imported into India. He has further submitted that applicability of the Notifications issued under Customs Act, 1962 for clearance to DTA is settled by various decisions as in the case of Himalayan International Ltd. vs. CCE 2003 (156) ELT 773, Ratnagiri Textiles Ltd. vs. CCE reported in 2003 (58) RLT 121, varsha Exports. Vs. UOI reported in 2000 (40) RLT 9 (Guj.) and Lucky Star International and Others reported in 2001 (134) ELT 26 (Guj). He has further submitted that while Notification No. 2/95 -CE Dated 4.1.95 would require payment of 50% of aggregate of duties of Customs leviable under the Customs Act, 1962 read with other law for the time being in force, the second proviso to the said Notification clearly states if duty leviable under Section 12 of the Customs Act, 1962 read with any notification under the said Customs Act, 1962 is NIL; then no duty is required to be paid and since in their case they are eligible to the Notifications No. CN 51/96 -Cus and CN 39/96 -Cus, they are not required to pay any duty in terms of the Second proviso to Notification No. 2/95 CE dt 4.1.95. He has also submitted that in identical case, for the earlier period, proceedings drawn in their own case were dropped by the Department vide order in Original No. 06/2001 dated 25.7.2001 and inasmuch as that decision has not been appealed against, it has attained finality. Therefore, the present proceedings initiated by the Department is not sustainable. In support of his plea he has invited our attention to the judgment of the Hon'ble Apex Court in the case of CCE, Calcutta viz Suntrack Electronics (P) Ltd. reported in 2003 (156) ELT 163 wherein the Hon'ble supreme Court has held that when similar earlier order has not been appealed against by the Revenue and Tribunal has relied upon its earlier order which the Revenue has not chosen to challenge, present appeal cannot be entertained. He has also invited our attention to the judgment of the Hon'ble apex Court in the case of CCE, Pune vs. Tata Engineering and Locomotives Co. Ltd. reported in 2003 (59) RLT 237 (SC) wherein also similar view was taken by the Hon'ble Supreme court. He therefore, submitted that the department was bound by their earlier decision as in order No. 6/2001 dated 25.7.2001 of the CCE, Trichy. He submitted that in view of above, the appellants have made out a strong prima facie in their favour, and therefore, prayed for waiver of pre -deposit of the amounts involved in this case.