SARLA PERFORMANCE FIBERS LIMITED ETC. versus COMMISSIONER OF CENTRAL EXCISE, SURAT-II

Citation: [2016] 7 S.C.R. 201 · Decided: 03-06-2016 · Supreme Court of India · Bench: DIPAK MISRA · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

[2016] 7 S.C:R. 201 
SARLA PERFORMANCE FIBERS LIMITED ETC. 
A 
v. 
COMMISSIONER OF CENTRAL EXCISE, SURAT -II 
(Civil Appeal Nos. 3555-3560of2012) 
JUNE 03, 2016 
[DIPAK MISRA AND SHIVA KIRT! SINGH, JJ.] 
Central Excise Act, 1944: s. 3 (1) and its proviso -
Chargeability under s.3(1) or under proviso of 3(1) - Assessee, a 
100% Export Oriented Unit - Clearance of goods without 
permission of Development Commissioner - Held: Duty is,payable 
uls.3(1) of the Act - If goods are not allowed to be sold in India, the 
proviso to s.3(1) shall not be applicable. 
Allowing the appeals, the Court 
B 
c 
HELD: The expression "allowed to be sold in India" used 
D 
in proviso to Section 3(1) of the Act would be applicable only to 
sales made in DTA of the production by 100% EOUs, which are 
allowed to be sold into India as per the provisions of the Exim 
Policy. (Para 35] (221-G-H] 
SIV Industries Ltd. v. CCE & Customs 2000 (2) SCR 
E 
231 : (2000) 3 SCC 367; CCE v. NCC Blue Water 
Products Ltd. 2010 (11) SCR 741 : 2010 (258) ELT 
161 - relied on. 
J.K. Synthetics Ltd. v. Collector of Central Excise 1996 
(86) ELT 472 (SC); Shrichakra Tyres Ltd. .v. CCE 
F 
Madras 1999 (108) ELT 61 (T); Sterlite Optical 
Technologies Ltd. v. CC&CE Aurangabad 2005 (188) 
ELT 201 (T); CCE Delhi v. Mis. Maruti Udyog Ltd. 
2002 (141) ELT 3 (SC); Himalaya. International Ltd. v. 
Commissioner of C.Ex. Chandigarh (2003) 154 ELT 
, 580 - referred to. 
G 
Case Law Reference 
1996 (86) ELT 472 (SC) 
2000 (2) SCR 231 
referred to 
relied on 
201 
Para6 
Para8 
H 
202 
SUPREME COURT REPORTS 
[2016] 7 S.C.R. 
A 
1999 (108) ELT 61 (T) 
2005 (188) ELT 201 (T) 
2002 (141) ELT 3 (SC) 
2010 (11) SCR 741 
referred to 
referred to 
referred to 
relied on 
referred to 
Paras 
Para9 
Para 12 
Para 14 
Para 19 
B 
(2003) 154 ELT 580 
c 
D 
E 
F 
G 
H 
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 3555-
3560of2012. 
From the Judgment and Order Nos. M/2113/WZB/AHD/2010, 
M/2114/WZB/ AHD/2010, M/2115/WZB/ AHD/2010, M/2116/WZB/ 
AHD/2010, M/2117/WZB/AHD/2010, M/2119 /WZB/AHD/2010, 
passed in Appeal Nos. E/2806/02, E/2807/02, E/2808/02, E/2809/02, 
E/2810 and E/2812/02 dated 16.12.20 I 0 of the Customs, Excise and 
Service Tax Appellate Tribunal, West Zonal Bench, Ahmedabad. 
S. K. Bagaria, Sr. Adv., Rohan P. Shah, Rohit Jain, Alok Yadav, 
Dhruv Bhattacharya, UditJain, Praveen Kumar, K. Ajit Singh, V. Lakshmi 
Kumaran, Jay Savla, S. Vasudevan, Ms. Renuka Sahu, Advs. for the 
Appellant. 
K. Radhakrishnan, A. K. Panda, Sr. Advs., Ms. Nisha Bagchi, 
Arjit Prasad, Ms. Pooja Sharma, B. Krishna Prasad, Praveen Kumar, 
Advs. for the Respondent. 
The Judgment of the Court was delivered by 
DIPAK MISRA, J. I. The appellant is a company registered 
under the Companies Act, 1956 and is engaged, inter alia, in the 
manufacture of excisable goods, namely, synthetic yam and for that 
purpose it has a factory at Unit-I, Survey No. 59/1/14, Amii, Piparia 
Industrial Estate, Silvassa (U.T. ofD.N.&H). The said factory is a I 00% 
Export Oriented Unit (EOU). Prior to 61h November, 2006, Sarla 
Performance Fibers Limited was known as Sarla Polyesters Ltd. Shri 
Madhusudan Jhunjhunwala and Shri Satish Kumar Sharma were the 
Chaimlan and the excise in-charge respectively of Sarla Performance 
Fibers Limited. Shri Dineshchandra Pandey was the dispatch in-charge 
ofM/s. Hindustan Cotton Company, a paitnership firm, engaged inter 
alia, in trading of Polyester Textured/Twisted Dyed Yarn since 1988. 
Sh. Gopal Bhagwan Dutt Sharma was the Manager of Sarla Performance 
Fibers Limited at the relevant time. The reference to appellants herein 
SARLA PERFORMANCE FIBERS LTD. v. COMMISSIONER OF 
203 
CENTRAL EXCISE, SURAT-II [DIPAK MISRA, J.] 
will mean and include all the appellants. 
2. The appellants had procured partial oriented yarn (POY) falling 
under Chapter 54 without payment of duty for the manufacture of various 
types of yam, namely, polyestertexturised yarn, nylon covered yarn and 
polyester covered yarn. A show cause notice No. V(Ch.54)15-6/0A/ 
2000 dated I 61h May, 2001 was issued by the Commissioner of Central 
Excise, Surat - II requiring the appellant to explain why central excise 
duty of Rs.32,92,854/-should not be recovered on the texturised yarn 
allegedly removed by the appellants without payment of duty. The said 
show cause notice also required the appellants to explain why penalty 
should not be imposed under Section 1 JAC of the Central Excise Act, 
1944 (for short, 'tl1e Act').

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