EOU – rate of duty – Supreme Court order – there was no need for remand at all
Today we are reporting a Supreme Court judgment relating to clearances made by an EOU in DTA against foreign exchange. The assessee paid duty on Texturised Polyester Yarn at the rate of 30% (equivalent to domestic excise duty) and the department argued that the assessee has to pay full aggregate duties of Customs ( BCD, CVD etc,). The Supreme Court ruled that the duty liability is as per proviso to Section 3 read with Notification 2/95 CE. Notification 2/95 CE during the material period exempted duty in excess of the amount calculated at the rate of fifty per cent of each of the duties of customs, which would be leviable under section 12 of the Customs Act (OR under any other law for the time being in force from 16.9.99)read with any other notification for the time being in force issued under sub-section (1) of section 25 of the said Customs Act on the like goods produced or manufactured outside India if imported into India.
In the Fabworthcase, it was held that entire duty in excess of 50% of BCD was exempted under 2/95, though as per section 3, the levy is aggregate of all customs duties. This resulted in adding " under any other law for the time being in force” later in 2/95
So 50% of 35% BCD on texturised yarn will be 17.5% . Since the domestic excise duty was 30% and the duty liability under 2/95 shall not be less than 30%, the assessee had paid 30% correctly. Had this been brought to the notice of their Lordships, may be the assessee could have avoided the remand.
See Breaking News for more details.