- (1.) This appeal is directed against the order dated November 5, 1997 of the Customs, Excise and Gold (Control) Appellate tribunal (for short the 'Tribunal') allowing the appeal of the respondent and directing that duty of Central Excise was payable under Section 3(1) of the Central Excise and Salt Act, 1944 (for short the 'Act') and not under proviso to Section 3(1) of the Act as claimed by the appellant.
(2.) Section 3(1) of the Act with proviso, in relevant part, is as under:- "Section 3. Duties specified in the Schedule to the Central Excise Tariff Act, 1985 to be levied - (1) There shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods other than salt which are produced or manufactured in India and a duty on salt manufactured in, or imported by land into, any part of India as, and at the rates, set forth in the Schedule to the Central Excise Tariff Act, 1985: Provided that the duties of excise which shall be levied and collected on any excisable goods which are produced or manufactured- (i) in a free trade zone and brought to any other place in India; or (ii) by a hundred per cent export oriented undertaking and allowed to be sold in India. shall be an amount equal to the aggregate of the duties of customs which would be leviable under Section 12 of the Customs Act, 1962 (52 of 1962), on like goods produced or manufactured outside India if imported into India, and where the said duties of customs are chargeable by reference to their value; the value of such excisable goods shall, notwithstanding anything contained in any other provision of this Act, be determined in accordance with the provisions of Customs Act, 1962 (52 of 1962) and the Customs Tariff Act, 1975 (51 of 1975). Explanation 1.- Where in respect of any such like goods, any duty of customs leviable under the said Section 12 is leviable at different rates, then such duty shall for the purposes of this proviso, be deemed to be leviable under the said Section 12 at the highest of those rates. Explanation 2- In this proviso,- (i) "free trade zone" means the Kandla Free Trade Zone and the Santa Cruz Electronics Export Processing Zone and includes any other free trade zone which the Central Government may, by notification in this Official Gazette, specify in this behalf; (ii) "hundred per cent export-oriented undertaking" means an undertaking which has been approved as a hundred per cent export oriented undertaking by the Board appointed in this behalf by the Central Government in exercise of the powers conferred by Section 14 of the Industries (Development and Regulation) Act, 1951 (65 of 1951), and the rules made under that Act."
(3.) Under the relevant import policy the 100% Export Oriented Unit Scheme (EOU) envisages an industrial unit offering for export its entire production, excluding rejects or items otherwise specifically permitted to be supplied to the Domestic Tariff Area. Industrial units approved by the Board of Approvals (BOA) set up for this purpose alone are eligible for import of capital goods, raw materials, components and spares, etc. required by them for export production under the Scheme. Based on the approval granted by the Board of Approvals a 100% EOU is eligible to import, without payment of customs duty, capital goods, office equipment, proto-types and technical samples, generating sets, raw materials, components consumables, intermediates, packing materials, material handling equipment like fork lifts, overhead cranes and spares under Open General Licence subject to certain conditions. Applications for approval as 100% Export Oriented Unit are to be submitted to the Secretariat for industrial Approvals, Ministry of Industry. Such EOU under no circumstances can be allowed to dispose of the export product in the domestic market specifically allowed by the Government.;