2021-TIOL-289-CESTAT-MUM

Axiom Cordages Ltd Vs CCE

CX - Appellant EOU are manufacturers and exporters HDPE/LDPE/PP Ropes and Yarn - The appellants have achieved positive NFE and there is no dispute on this count. The appellants have also cleared Yarn and Ropes in DTA - It is alleged that the appellants have availed concessional duties of Central excise, on goods cleared in DTA, in excess of the permitted 90% of the FOB value of the exports, in contravention of Para 6.8[a] of the Foreign Trade Policy and condition [2] of the notification number 23/2003-CE dated 31-03-2003 - Show cause Notices were issued and duty was confirmed vide orders which are impugned before the Tribunal - Appellant submitted that Twisted Yarn and Rope are similar goods; Rope is nothing but bunch of twisted yarns; yarns are thus intermediate goods; FOB value of Ropes Exported should be counted for the DTA entitlement of Ropes or Yarns; the products manufactured by the Appellant (Twisted Yarn and Ropes) are similar products; they are similar in quality, character and appearance; rope is nothing but intertwined twisted yarn; that the word ‘similar' is expansive and not restrictive like ‘same' and that the definition available in the Customs Act cannot be used in respect of Notification issued under other enactment.

Held: [para 23, 24]

+ Twisted yarn and Ropes are under the same category of goods under SION and can be held to be similar goods in the broader sense of the word. Therefore, Bench finds that the case is in no way in favour of the Revenue.

+ Reliance placed by AR on the apex court decision in the case of Shri Dilip Kumar and others [2018-TIOL-302-SC-CUS-CB] is not applicable as the issue doesn't pertain to interpretation of a Notification but interpretation of Provisions of the Policy.

+ The implementing authority, the Development Commissioner has not raised any objection on the DTA sales made by the Appellant. Therefore, we hold that the ratio of cases is to be applied if the facts of the case are comparable and that a strenuous stretching of facts is not permissible.

+ Moreover, in the instant case there is no allegation that export obligation has not been fulfilled and positive NFE was not achieved. A close look at the scheme of the EOU, gives an understanding that the scheme places on reliance of the value of exports and not the quantities. Therefore, we find that positive NFE being achieved, the appellants are within their rights to avail the facility of DTA clearance in terms of Para 6.8 of FTP.

+ Appeals are allowed with consequential relief.

- Appeals allowed: MUMBAI CESTAT