Cut-flowers are non-excisable goods - question of levy of excise duty on 'cut-flowers' cleared by EOU to DTA will not arise at all: CESTAT
THIS is a Revenue appeal of the year 2004.
The adjudicating authority held that since the respondents did not have permission from the Development Commissioner of EPZ for DTA sales, the 'cut flowers' cleared would be leviable to excise duty at the rate equivalent to aggregate of the customs duty leviable on cut flowers imported into India and accordingly confirmed the demands.
The respondents filed appeals before the Commissioner (A) who held that since "cut flowers" are not excisable goods, the question of levying any duty u/s 3 of the CEA, 1944 would not arise. Reliance was also placed on the LB decision in Vikram Ispat () wherein it is held that the customs duty is not leviable and what can be charged in respect of clearance from 100% EOU into DTA is only excise duty leviable under section 3 of the Act.
Before the CESTAT, the Revenue submits that in terms of the Notification no. 126/94-Cus dated 03/06/1994 there is a provision for charging of duty on non-excisable items also equal to the Customs duty leviable on the imported inputs which have gone into production or manufacture of the non-excisable items and, therefore, the demand is sustainable in law.
The respondents were not represented.
After adverting to the provisions of section 3 of the CEA, 1944, the Bench observed -
"5.1 As per section 2(d) of the Act, "excisable goods" means 'goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 as being subject to a duty of excise and includes salt". The period involved in these appeals is April 1998 to September 1998 and January 1999 to June 1999 & July 1999 to September 1999. During this period, the Central Excise Tariff did not specify "cut flowers" as excisable goods nor any rate of duty was prescribed for "cut flowers". Even in the amended tariff effective from 2008 where the excise tariff has been aligned with the customs tariff cut flowers fall under Chapter 6 and there is no rate of duty mentioned against cut flowers and the column regarding rate of duty is left blank. This implies that even after amendment to the Central Excise Tariff in 2008 cut flowers remains a non-excisable goods. If the goods are non-excisable goods, the question of levy of excise duty would not arise at all. Therefore, there is absolutely no merit in the appeals filed by Revenue…"
The Revenue appeals were dismissed.