ORDER
S.S. Kang, Member (J)
1. The issue regarding the manner to computing the “amount of duty calculated at the rate of 50% of each of the duties of customs” under Notification No. 2/95-C.E., dated 4-1-1995 is referred to the Larger Bench in view of the conflicting decisions of the Tribunal in the case of Futura Polymers Ltd. v. Commissioner of Central Excise, Chennai, reported in 2003 (152) E.L.T. 156 (Tri. – Del.) and in the case of Uniworth Textiles Ltd. v. Commissioner of Customs and Central Excise, Nagpur, reported in 2003 (157) E.L.T. 669 (Tri. -Mumbai).
2. The period in dispute is prior to the amendment made in the Notification No. 2/95-C.E., dated 4-1-1995 by Notification No. 11/2002-C.E., dated 1-3-2002. In the case of Futura Polymers Ltd. v. Commissioner of Central Excise, Chennai (supra), the Tribunal held that as per the provisions of Notification No. 2/95-C.E., dated 4-1-1995, the amount of duty is to be calculated at the rate of 50% of each of the duties of customs. In the case of Uniworth Textiles Ltd. v. Commissioner of Customs & Central Excise, Nagpur (supra), the Tribunal after taking into consideration the Central Board of Excise & Customs, New Delhi Circular No. 7/2001-Cus., dated 6-2-2001 held that the amount of duties is to be calculated equivalent to 50% of aggregate of duties of customs.
3. The contention of the appellants is that during the period in question, the Notification No. 2/95-C.E., dated 4-1-1995 exempts the goods cleared to Domestic Tariff Area (DTA) by 100% EOU from so much the duties of excise leviable thereon under Section 3 of the Act as is in excess of amount calculated at the rate of 50% of each of duties of customs. The Central Board of Excise & Customs, Circular F. No. 512/91/93-Cus.VI, dated 18-5-1994 and Circular F. No. 345/12/99-TRU, dated 24-9-1999 provides the method of computation of duty to be paid by 100% EOU on the goods manufactured by them and cleared to DTA. The contention is that by Circular No. 7/2001-Cus., dated 6-2-2001, the Board revised its method of computation of duty without amending the Notification. By applying this Circular the duty was demanded on the basis of aggregate of duties of customs. The Notification No. 2/95-C.E., dated 4-1-1995 was further amended by Notification No. 11/2002, dated 1-3-2002 and it was specifically provided in the notification that the exemption to DTA sales by 100% EOU in excess of amount equivalent to 50% of aggregate of the duties of customs. The contention is that after this amendment, the Revenue is entitled to compute the amount of duty equivalent to 50% of aggregate of the duties of Customs. The contention is that prior to the amendment of the Notification No. 2/95-C.E., dated 4-1-1995, with effect from 1-3-2002, the Revenue can only calculate the rate of amount of duty at the rate of 50% of each of duties of customs.
4. The contention of the Revenue is that Section 3 of the Central Excise Act was amended retrospectively by Finance Act, 2000 which provides that duty of excise shall be levied and collected on any excisable goods which are produced or manufactured by 100% Export-Oriented Unit brought to any other place in India shall be amount equal to the aggregate of duties of customs which would be leviable under Customs Act or under any other law for the time being in force, on the like goods produced or manufactured outside India if imported into India. The contention is that in view of this amendment, the Board issued Circular dated 6-2-2001 rescinding the other Circular and according to amendment of the provisions of Section 3 of the Act the amount of duty is to be calculated equivalent 50% of aggregate of duties of Customs.
5. In this case the period in dispute is January 2001 to February 2001. During this period the Notification No. 2/95-C.E., dated 4-1-1995 provides exemption to the goods cleared by EOU to DTA from so much of duty of excise leviable thereon under Section 3 of the Central Excise Act as in excess of amount calculated at the rate of 50% of each of the duties of customs. The notification does not provide for exemption from payment of so much of duties of excise as in excess of the amount equal to 50% of the aggregate of duties of customs as provided under the Board Circular dated 6-2-2001. Such wordings were introduced in the Notification No. 2/95-CE., dated 4-1-1995 only w.e.f. 1-3-2002 by amending Notification No. 11/2002, dated 1-3-2002. We have to consider the provision of exemption notification exists during the period of disputes. We find that though the Section 3 of the Central Excise Act was amended retrospectively by Finance Act, 2000 which provides that the duty of excise shall be levied and collected on the excisable goods cleared by EOU shall be an amount equal to aggregate of duties of customs but in spite of this amendment the Notification No. 2/95-C.E., dated 4-1-1995 was not amended during the relevant period. Section 5A(3) of the Central Excise Act which empower to Central Government of exempt goods from payment of duty provides that exemption may be granted by providing for levy of duty at the rate expressed in a form or method different from the form or method in which the statutory duty is leviable. In view of the specific method provided under Notification No. 2/95-C.E., dated 4-1-1995 prior to 1-3-2003 is applicable for calculation of duty under the notification and scope of method of calculation of the duty provided there cannot be enhanced or varied by issuing the Circular dated 6-2-2001 without amending the notification. The method adopted by the Revenue for calculation of amount of duty equivalent to 50% of aggregate of duties of customs is valid only after 1-3-2002 when the notification was amended to this effect.
6. In view of the above discussion we agree with the view taken by the Tribunal in the case of Futura Polymers Ltd. v. Commissioner of Central Excise, Chennai (supra). The question referred to the Larger Bench is answered in the above terms. The matter be placed before the regular Bench for deciding the appeal on merit.