Page 132 - ELT_1_1st April 2020_Vol 372_Part

18 EXCISE LAW TIMES [ Vol. 372

2003 for the identical charges for different periods (i.e. from March, 2000 to May,
2003) were issued.
9. In response to the show cause notices, UFAC had submitted its writ-
ten replies stating therein, that in the show cause notices no violation of Central
Excise Law has been alleged. It was submitted, that the removals in the DTA
were in accordance with the permission granted by the Development Commis-
sioner and, as such, there was no ground for denial of the concessional rate of
duty laid down in the said Exemption notification. It was further submitted, that
since the issue was based on the interpretation of the provisions of EXIM Policy,
it was necessary to obtain ruling of the Development Commissioner on the issue.
It was submitted, that since the Development Commissioner had clarified that
the removals made by UFAC to TISCO were in accordance with the permission
under the EXIM Policy, there was no occasion to proceed further.
10. However, the Commissioner while passing the Order-in-Original
came to a finding that the conversion work performed by UFAC was nothing but
the job work and that the said job work done by an EOU was governed by Para
9.17(b) of the EXIM Policy. He found, that under Para 9.17(b) of the EXIM Policy,
an EOU was permitted to do job work for a DTA unit only for the purposes of
exporting the finished goods directly from EOU. However, since after the job
work the finished goods were not exported by the EOU but cleared to a DTA
unit for home consumption, the UFAC had contravened the provisions of the
EXIM Policy. He also came to a finding, that the sector in which UFAC had un-
dertaken the job work was not covered by the Circular dated 14-9-1998 and as
extended by another Circular dated 5-11-1999, issued by the Board. He also came
to a conclusion that since there was no sale of the goods but only return of the
goods after job work, it was not a sale and, as such, contrary to the provisions of
the EXIM Policy. He, therefore, vide order dated 23-6-2003 confirmed the de-
mand for Rs. 11,56,08,497/- along with interest. He also imposed penalty of Rs.
50 lakhs on UFAC. He further held, that the goods i.e. 15792.85 MTs of Silicon
Manganese valued at Rs. 32,31,30,000/- were liable for confiscation. However,
since the said goods were not available for confiscation, redemption fine of Rs. 50
lakhs in lieu of confiscation was imposed. Two more similar orders confirming
demand as raised under subsequent show cause notices were also passed vide
order dated 23-6-2003 and 15-3-2004. In the second order dated 23-6-2003 being
Order-in-Original No. 21 of 2003, personal penalty of Rs. 5 lakh was also im-
posed on the Chairman of UFAC, Dhunjishaw M. Naterwala.
11. Being aggrieved thereby, the UFAC as well as the Chairman of
UFAC, Dhunjishaw M. Naterwala preferred appeals before the Learned
CESTAT.
12. The Commissioner (Appeals) had set aside the demand raised by
the Revenue in respect of duty free carbon paste procured by UFAC under the
CT-3 certificate in terms of Notification No. 1/95-C.E., dated 4-1-1995 for use in
the conversion process of Manganese ore. Being Aggrieved thereby, the Revenue
filed appeal before the CESTAT being Appeal No. E/1607/2006. By the im-
pugned judgment dated 21-10-2005, the demand orders against UFAC were re-
versed by the CESTAT. Also, the CESTAT dismissed the Revenue’s Appeal No.
E/1607/2006 by order dated 7-7-2006, referring to its order and judgment dated
21-10-2005 in UFAC’s appeal. Hence, the present appeals.
13. We have heard Shri K. Radhakrishnan, Learned Senior Counsel ap-

EXCISE LAW TIMES  1st April 2020  180