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Central Excise Act, 1944: s.3(1) and its proviso, s.5(1) and its proviso – Job work – Export Oriented Unit (EOU) – Respondent is 100% EOU and engaged in manufacture/processing and clearance of Ferro Manganese and Silicon Manganese – Revenue’s allegation against the respondent was that the respondent was indulging in the job work activity of conversion of raw material supplied by TISCO – As per agreement between Respondent and TISCO, TISCO was to supply Manganese Ore and Coke/Coal free of cost at its site and rest of the raw materials and consumables required for conversion of Manganese Ore/Coke into Silicon Manganese for TISCO was to be used by respondent from their own purchases – Further, TISCO was to pay job charges to respondent – Show cause notice issued to the respondent on the ground that Circular No.67/98-Cus dated 14.9.1998, issued by the CBEC had permitted the EOUs to undertake job-work on behalf of a DTA unit only in textile, readymade garments, agro-processing and granite sectors and by another Circular No.74/99 dated 5.11.1999, the said facility was extended in aquaculture, animal husbandry, electronics hardware and software sectors and the sector in which respondent-assessee had carried out the job-works was not covered by either of the Circulars and, as such, the said job- works were in violation of EXIM Policy – Show cause notice called upon the respondent -assessee to show cause, as to why the said Silicon Manganese should not be charged to full Central Excise duty as per the proviso to s.3(1) of the Central Excise Act, 1944 by denying the benefit of Notification No.8/97 dated 1.3.1997 – In response to the show cause notices, it was submitted by respondent that the removals in the DTA were in accordance with the permission granted by the Development Commissioner and, as such, there was no ground for denial of the concessional rate of duty laid down in the said Exemption notification – Held: Under paragraph 9.17(b) of the EXIM Policy 1997-2002, the EOU/EPZ units are entitled to undertake job-work for export, on behalf of DTA units, with the permission of Assistant Commissioner of Customs, provided the goods are exported direct from the EOU/EPZ units and for such exports, the DTA units will be entitled for refund of duty paid on the inputs by way of Brand Rate of duty drawback – It is not in dispute that all transactions between the respondent and TISCO were entered into after obtaining necessary permission from the Development Commissioner – The combined reading of paragraph 9.9(b) of the EXIM Policy and the Circulars issued by the Board, particularly, Circular dated 22.5.2000 showed that the respondent was entitled to carry out the job-work on behalf of TISCO on payment of duty as provided under Exemption Notification of 1997 – In view of paragraph 10 of Circular no.49/2000- Cus dated 22.5.2000, the facility of undertaking job-work by EOU/EPZ units which was restricted to specific sectors was amended and the said facility was extended to all sectors – It also provided that DTA units shall be entitled to brand rate of duty draw back – Notification No.21/97- C.E. dated 11.4.1997 specifically provides grant of exemption to the EOUs from payment of duties, which are in excess of what is leviable under sub-section (1) of s.3 on like goods, produced or manufactured in India – Exemption Notification specifically mentions, that the goods produced or manufactured by an 100% EOU, which are allowed to be sold in India in accordance with para 9.9(b) of the EXIM Policy, the proviso would be inapplicable thereby, requiring the duties to be paid, as are required to be paid under sub-Section (1) of s.3 of the said Act – Undisputedly, in the instant case, the goods were produced and manufactured by the respondent, an 100% EOU; they were manufactured wholly from the raw materials produced or manufactured in India and, allowed to be sold in India in accordance with the provisions of paragraph 9.9(b) of the EXIM Policy – Thus the conditions of Notification No.21/97-C.E. were satisfied – Therefore, respondent was entitled to carry out the job work for TISCO and entitled to exemption from payment of duty – Revenue’s appeal was rightly dismissed by CESTAT Interpretation of Statutes: Excise Act – It is a settled principle in excise classification that the definition of one statute having a different object, purpose and scheme cannot be applied mechanically to another statute – It is also equally well settled that the first principle of interpretation of plain and literal interpretation has to be adhered to – Therefore, the narrower scope of the term ‘sale’ as found in the Sale of Goods Act, 1930 cannot be applied in the instant case – The term ‘sale’ and ‘purchase’ under the Central Excise Act, 1944, if construed literally, it would give a wider scope and also include transfer of possession for valuable consideration under the definition of the term ‘sale’. |
