Commissioner of C. Ex. and Cus. vs Ghodela Impex

H.N. Devani, J.—Appellant-revenue has challenged order dated 26-11-2008 made by Customs, Excise and Service Tax Appellate Tribunal (the Tribunal) proposing the following questions:

Whether in the facts and the circumstances of the case, the Ld. CESTA Tribunal has erred in the eye of law in not holding that the practice adopted by the said assessee would in effect defeat the purpose of the Exemption Notification No. 8/97, dtd. 1-3-1997?

Whether in the facts and the circumstances of the case, the Ld. CESTA Tribunal is justified in the eye of law in holding that the said assessee would be entitled to the benefit of the said Exemption Notification No. 8/97, dtd. 1-3-1997?

Whether in the facts and the circumstances of the case, the Ld. CESTA Tribunal is justified in the eye of law in holding that the inter-unit sales between EOUs can be on the same footing as the supplies by the Domestic Tariff Area Unit to a EOU?

Whether in the facts and the circumstances of the case, the Ld. CESTA Tribunal has erred in the eye of law in not holding that there is the clear distinction between the Export Oriented Unit and the Domestic Tariff Area Unit?

Whether in the facts and the circumstances of the case, the Ld. CESTA Tribunal is justified in the eye of law in holding that the goods manufactured by 100% EOU can be treated as ''the goods manufactured in India''?

Whether in the facts and the circumstances of the case, the Ld. CESTA Tribunal is justified in the eye of law in holding that the verification of all the raw materials received by the said assessee from the other 100% EOUs were of indigenous origin or not is required to be determined and decided by the original adjudicating authority?

Whether in the facts and the circumstances of the case, the Ld. CESTA Tribunal is justified in the eye of law in holding that the said assessee is eligible for the refund subject to the verification of the Unjust Enrichment aspect?

Heard learned Standing Counsel for the appellant-revenue .

The respondent is engaged in the manufacture of ready made garments falling under Chapter sub-heading No. 6201.00 of Central Excise Tariff Act, 1985. The respondent removed rejects and waste of ready made garments in the Domestic Tariff Area during the period 4-9-2000 to 14-3-2002 and subsequently filed a refund claim for Rs. 12,61,982/- on the ground that an amount of Rs. 18,51,934/- had been paid under protest towards duty calculated in terms of Notification No. 2/95 dated 4-1-1995, whereas it was required to pay duty of Rs. 5,90,042/- only in terms of Notification No. 8/97. Pursuant to the application, show cause notice came to be issued denying the claim made by the respondent, which culminated into an order dated 12-9-2003 of the Deputy Commissioner of Central Excise, rejecting the claim of refund made by the respondent on the ground that the goods received from a 100% EOU under C.T.-3 procedure are deemed to be imported raw materials for the purposes of notifications No. 2/95 dated 4-1-1995 (as amended), No. 13/98 dated 2-6-1998 (as amended) and 8/97 dated 1-3-1997 (as amended). The assessee carried the matter in appeal before Commissioner (Appeals) who, vide order dated 24-9-2004, allowed the appeal holding that duty free raw materials procured by one 100% EOU from other 100% EOUs are to be considered as procurement from indigenous source only and hence, DTA clearances from such 100% EOUs would be covered by Notification No. 8/97. Revenue preferred appeal before the Tribunal which came to be decided by the impugned order.

As can be seen from the impugned order of the Tribunal, the Tribunal has accepted the submissions of the departmental representative that it was required to be verified as to whether 100% EOUs had supplied raw materials to the respondent assessee out of imported stocks. The Tribunal found that in the facts of the present case there was no specific submission that the materials received from other EOUs were only of indigenous origin and was accordingly of the view that as to whether all the raw materials received by the respondent from other 100% EOUs were of indigenous origin or not was required to be verified and that if it was established that the raw materials so received were of indigenous origin, the respondent would be eligible for refund, subject to verification of the aspect of unjust enrichment.

Thus, it is apparent that the Tribunal has only accepted the say of the departmental representative that the nature of the raw materials received by the respondent from 100% EOUs was required to be verified as to whether the same were of indigenous nature or not and has accordingly directed the concerned authority to inquire as to whether all the raw materials received by the respondent from other 100% EOUs were of indigenous origin or not and grant the claim of refund made by the respondent only upon such verification. In the circumstances, no infirmity can be found in the impugned order of the Tribunal in directing that the claim of the respondent be considered after verification the nature of the raw material.

In the aforesaid factual matrix, it is apparent that none of the questions proposed arise out of the impugned order of the Tribunal. In the circumstances, in absence of any legal infirmity in the impugned order made by the Tribunal, the appeal is dismissed.