Ceramic colours cleared by Exporter for Export and DTA are ‘Similar’ as Manufacturing Activities are Same: CESTAT allows exemption [Read Order]

Ceramic colours - exporter - DTA - manufacturing activities - CESTAT - exemption - Taxscan

The Customs, Excises, Service Tax Appellate Tribunal (CESTAT), Mumbai Bench while allowing the exemption ruled that the Ceramic colors cleared by the exporter for export and DTA are ‘Similar’ as manufacturing activities are the same.

The appellant, M/s BR Steels Products Pvt Ltd is an EOU engaged in the manufacture and export of ‘Ceramic Colours/Pigments, falling under CETA 32071040.

The appellants have cleared goods in DTA in terms of Para 6.8 of FTP and availing exemption contained under Notification No. 23/2003-CE dated 31.03.2003. It was alleged by the Department that the items cleared in DTA by the appellants were not similar to the goods exported and there was a violation of the provisions of Para 6.8 of FTP and thus the exemption contained in the notification cited above was wrongly availed.

The appellants submitted that the appellants obtained necessary permission from the Development Commissioner for export and clearance in DTA, the manufacturing activities are similar for the goods either exported or cleared in DTA. The only difference between the goods cleared for exports is that they are more in concentrate form when compared to the goods cleared in DTA, consequently, the goods exported are costlier than the goods cleared in DTA.

The appellant further submitted that the expression “similar goods” does not mean “identical goods”; it only means corresponding to or resembling in many respects somewhat like or having a general likeness and falling in the very same class; the term “similar” has a very wide connotation and not restricted as per the ratio of various judgments; when the development Commissioner has permitted to manufacture and export all types of ceramic colours and type of ceramic colours can be cleared into DTA, Central Excise department lacks the jurisdiction to question the correctness thereof.

The issues raised was whether the ceramic colours cleared by the appellants for export as well as DTA are similar and whether benefit of notification cited above can be extended to the impugned goods.

The coram of S.K. Mohanty and P. Anjani Kumar held that the words “similar” cannot be restricted to mean “same” or “identical”; instead, when wider meaning is given to the words “similar” it will encompass the goods broadly falling within the same class or category.

The Tribunal noted that the department did not bring forth any change in the circumstances or the quality of the goods exported and cleared in DTA by the appellant.

The CESTAT found that the department has wrongly tried to differentiate between the goods on the basis of physical characteristics or the price of the same.

Subscribe Taxscan AdFree to view the Judgment

Support our journalism by subscribing to Taxscan AdFree. We welcome your comments at info@taxscan.in

Related Stories