ORDER
C. Satapathy, Member (T)
1. Heard both sides. The basic issue in this case is interpretation of notification No. 2/95-CE dated 04.01.1995 as amended and computation of the duty liability there under. the period involved is 01.01.2000 to 28.02.2000.
2. Notification No. 2/95 was emended by Notification No. 38/99-CE dated 16.09.1999. After this amendment, the notification exempted the impugned good 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 50% of each of the duty of customs, which would be levied under the Customs Act, 1962 or under any other law for the time being in force on like goods imported into India. Section 3 of the Central Excise Act was also amended retrospectively by the Finance Act, 2002. The amended provision is extracted below :-
“Provided that the duties of excise which shall be levied and collected on any excisable goods winch are produced or manufactured, –
(i) in a free trade zone or a special economic zone and brought to any other place in india; or
(ii) by a hundred per cent export – oriented undertaking and brought to any other place in India,
Shall be an amount equal to the aggregate of the duties of customs which would be leviable under the Customs Act, 1962 (52 of 1962) or any other law for the time being in force, 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 the Customs Act, 1962 (52 of 1962) and the Customs Tariff Act, 1975 (51 of 1975).”
3. In view of these amendments made to Section 3 of the Central Excise Act and to Notification No. 2/95, it is clear that during the disputed period the duty levaible on D.T.A clearance had to include basic customs duty charged under Section 12 of the Customs Act as well as the Additional customs duty levied under the Customs Tariff Act which are chargeable on like goods imported into India. The dispute remains regarding the manner of computing the “amount of duty calculated at the rate of 50 % of each of the duties of customs”, under Notification 2/95. We not that the following circulars have been issued by the Board regarding the manner of computation : –
1) F.No. 512/19/93-Cus. VI dated 18.05.1994
2) F.No. 345/12/99-TRU dated 24.09.1999
3) F.No. 305/93/2000-FIT dated 06.02.2001 (Circular No. 7/2001)
The circular of 2001 specifically rescinds the circular of 1994 and directs recovery of duty calculated on the basis of calculation given in the 2001 circular with effect from 16.09.1999.
4. The impugned order passed by the Commissioner is in accordance with the 2001, Circular. the appellants have placed reliance on the decision of the Tribunal in the case of futura Polymers Ltd. v. CCE, Chenai – 2003 (54) RLT 405 (CEGAT-Del) which has held interalia that the 2001 circular which prescribes a revised method of calculation of duty can not be applied retrospectively for the period prior to 06.02.2001.
5. Shri M.K. Gupta, learned J.C.D.R. appearing for Revenue has submitted that Futura Polymers (Supra) has not noticed the 1999 circular cited above which was specifically issued soon after amendment to Notification No. 2/95 made on 16.09.1999. He also contends that the method of calculation given in the 1999 circular is the same as given in the 2001 circular. He further states that the Tribunal is in error in Futura Polymers (Supra) case in recording in paragraph 10 that the Board for the first time provided a method or computation of duty in 2001, which matched the terms of the proviso to Section 3(1) of the Act. It is his contention that the applied method of computation was already prescribed as stated above in 1999 itself, winch the Tribunal has failed to notice. He further submits that in the light of above the very basis of the decision in Futura Polymers (Supra) that the 2001 circular can not be retrospectively applied is incorrect and that the department is merely seeking to apply the 1999 circular with prospective effect in January-February 2000, the period of dispute in this case.
6. After hearing both sides and perusal of case records, we note that as pointed out by the learned J.C.D.R., Futura Polymers (Supra) has not noticed that Board had issued a Circular on 24.09.1999 son after making amendments to Notification No. 2/95 and prescribing a method of calculation different from the method earlier given in the circular of 1994. While we agree with the ratio of the Futura Polymers (Supra) that department’s Circulars can not be retrospectively applied, in the instant case, the methods of calculation given in the 1999 and 2001 Circulars being the same and the period of dispute being 01.01.2000 to 28.02.2000, we hold that this is not a case of retrospective application.
7. Moreover, we also note that the wording of the Notification 2/95 requires that each duty of customs has to be worked out separately as if the exemption did not exist and then halved applying the exemption. The 1999 amendment requires all these duties to be paid and hence aggregated. The 2002 amendment requires aggregation first and then halving the same. In our view, both have the same result. The DTA clearances must pay 50% of the duty that like imported goods pay. Example A in the 1994 Circular requiring 46.25% duty payment is contrary to the express provision in the notification. The calculated percentage would also vary depending on the duty rates on different items if this method is applied whereas the notification expresses no such intention except allowing a flat rate of 50% exemption of all DTA clearances. However, we are of the view that the consequence of issuing a wrong circular in 1994 cannot continue to visit the department beyond 24.09.1999, the date on which a fresh circular was issued giving the correct method of calculation. We also note that the 2001 Circular merely reiterated the method of calculation given in the 1999 Circular.
8. consequently, hold that the amount demanded in the impugned order is correct being equal to 50% of the duty chargeable on like imported goods.
9. The appeal is rejected.