COMMISSIONER OF CENTRAL EXCISE, VISAKHAPATNAM-IIversusM/S. NCC BLUE WATER PRODUCTS LTD.

                     [2010] 11 S.C.R. 741


          COMMISSIONER OF CENTRAL EXCISE,                            A
                  VISAKHAPATNAM-11
                                v.
         M/S. NCC BLUE WATER PRODUCTS LTD.
            (Civil Appeal Nos.4608-4609 of 2005)
                                                                     B
                    SEPTEMBER 24, 2010
              [D.K. JAIN AND H.L. DATTU, JJ.]

     .. Central Excise Act, 1944 - s.3(1) or its proviso - Sale of
  shrimps and shrimp seeds in Domestic Tariff Area by an EOU         C
  without approval of the Development Commissioner -'-
  Exigibi/ity to excise duty - Held: Excise duty to be assessed
  under s. 3(1) and not under proviso to the said section -
  Circular No. 6181912002-CX dated 13th February, 2002
  issued by CBEC - Exim Policy 1992-1997 - Handbook of               D
. Procedures - Appendix XXX/11.

     The question which arose for consideration in the
instant appeals was whether the sales of shrimps and
shrimp seeds by the assessee-respondent, a 100%                      E
export oriented undertaking (EOU), in the Domestic Tariff
Area (OTA) without the approval of the Development
Commissioner were liable to . {Cise duty under Section
3(1) of the Central Excise Act, 1944 and not under the
proviso appended thereto.
                                                                     F
     Dismissing the appeals, the Court
      HELD: 1. All excisable goods produced or
. manufactured in India are exigible to duty of excise under
  Section 3 of the Central Excise Act, 1944, the charging            G
  Section, at the rates set forth in the Schedule to the
 Central Excise Tariff Act. However, proviso to the said
 Section provides that the duties of excise on any
 excisable goods, which are produced or manufactured
                               741                                   H
    742    SUPREME COURT REPORTS              [2010] 11 S.C.R.


A   by a 100% EOU and allowed to be sold in India shall be
    an amount equal to the aggregate of the duties of
    customs which would be leviable under Section 12 of the
    Customs Act, 1962. [Para 15] [751-C-D]
      2. It was held in *SIV Industries that if the goods were
8 sold without the permission of the Central Government
  to debond the unit, the duty on the goods sold by the
  assessee was leviable under main Section 3(1) of the Act.
  After the decision in *SIV Industries' case, a Circular was
  issued on 13th February, 2002 by the Central Board of
C Excise & Customs, New Delhi clarifying that prior to 11th
  May, 2001, the clearances from EOUs, if not allowed to
  be sold in India, shall continue to be chargeable to duty
  under main Section 3(1) of the Act. [Paras 16, 17] [751-F-
  G; 752-E]
D
       *SIV Industries Ltd. v. Commissioner of Central Excise
  & Customs 2000 (117) ELT 281 (SC), relied on.
        Circular No. 6181912002-CX dated 13th February, 2002
    issued by CBEC - referred to.
E
       3. According to the Exim Policy 1992-1997 read with
  Appendix XXXlll of the Handbook of Procedures, an EOU
  may sell 50% of its production in value terms into a
  Domestic Tariff Area only on issuance of a removal
F authorization by the Development Commissioner. In the
  instant case, admittedly at the time of sales of shrimps
  and shrimp seeds by the assessee in OTA, the
  Development Commissioner had not issued the requisite
  removal authorization. Therefore, in view of the dictum of
  this Court in *SIV Industries, and the Circular dated 13th
G February, 2002, excise duty on such sales is chargeable
  under main Section 3(1) of the Act. [Paras 18, 19] [754-A-
    D]
       4. The controversy with regard to the classification
H of the shrimp seeds is academic in nature as even if the
 COMMNR. OF CENTRAL EXCISE, VISAKHAPATNAM v.              743
      NCC BLUE WATER PRODUCTS LTD.
finding of the Commissioner on classification of shrimp          A
seeds under sub-heading 0301.00 of the Central Excise
Tariff Act is affirmed, still the duty payable on these goods
would be nil. Similarly, if the excise duty payable is nil,
the other question regarding the extended period of
limitation on the alleged ground of suppression of sales         8
also pales into insignificance. [Para 20, 21] [754-D-E-H;
755-A-B]

     Sam Spintex Ltd. v. Commissioner of C. Ex., Indore
2004 (163) E.L.T. 212 (Tri.-Del.); Commissioner of Central
Excise, Jaipur-II v. Pratap Singh 2003 (153) E.L.T. 711 (Tri.-   C
Del.); Modern Denim Ltd. v. Commissioner of Central Excise,
Ahmedabad 2005 (191) E.L.T. 1174 (Tri.-Mumbai); M/s
Padmini Products v. Collector of Central Excise, Bangalore
(1989) 4 SCC 275; Collector of Central Excise, Hyderabad
v. Mis Chemphar Drugs & Liniments, Hyderabad (1989) 2            D
SCC 127; Gopal Zarda Udyog & Ors. v. Commissioner of
Central Excise, New Delhi (2005) 8 SCC 157, referred to.
                     Case Law Reference:
 2000 (117) ELT 281 (SC)             . relied on   Para 11       E
 2004 (163) ELT 212 (Tri.-Del.)      referred to Para 9
 2003 (153) ELT 711 (Tri.-Del        referred to Para 12
 2005 (191) ELT 1174 (Tri.-Mum) referred to Para 12              F
 (1989) 4 sec 215                    referred to Para 12
 (1989) 2 sec 121                    referred to Para 12
 (2005) 8 sec 151                    referred to Para 12
                                                                 G
    CIVIL APPPELLATE JURISDICTION : Civil Appeal No.
4608-4609 of 2005.

    From the Judgment and order dated 27.12.2004 of the
Customs, Excise and SeNice Tax Appellate Tribunal, South
                                                                 H
    744      SUPREME COURT REPORTS                   [2010) 11 S.C.R.


A   Zone, Bench at Bangalore in Appeal Nos. E/1138/1999 and
    E/714/2000.

                                   WITH

    Civil Appeal No. 903 of 2006.
B
    Civil Appeal No. 7590 of 2005.

    Civil Appeal No. 2986 of 2008.

        R.P. Bhatt, Naresh Kaushik, Ajay Sharma, B.V. Bairam
C   Das, B.K. Prasad and Anil Katiyar for the Appellant.

          Joseph Vellapally, G. Ramakrishna Prasad, B. Syoudhan,
    Amarpal, Bharat J. Joshi, Md. Wasay Khan and Ragvesh Singh
    for the. Respondent.
D         The Judgment of the Court was delivered by

         D.K. JAIN, J. 1. Challenge in this batch of appeals filed
    by the revenue under Section 35(L)(b) of the Central Excise
    Act, 1944 (for short "the Act") is to the orders. passed by the
E   Customs, Excise and Service Tax Appellate Tribunal, South
    Zone (for short "the Tribunal"), inter alia, holding that the duty of
    Central Excise on shrimps and shrimp seeds produced and
    removed by the respondent (hereinafter referred to as "the
    assessee"), a 100% Export Oriented Unit (for short "EOU"), in
F   the Domestic Tariff Area (for short "OTA") without the approval
    of the Development Commissioner, would be payable under
    Section 3(1) of the Act and not under the proviso appended
    thereto.

        2. Since the question of law arising for our consideration
G in all the appeals is the same, they are disposed of by this
  common judgment. In order to comprehend the controversy in
  these appeals, a brief reference to the facts in Civil Appeal
  Nos.4608-4609 of 2005, which was treated as the lead case,
  would suffice:
H
 COMMNR. OF CENTRAL EXCISE, VISAKHAPATNAM v.               745
  NCC BLUE WATER PRODUCTS LTD. [D.K. JAIN, J.]
     The assessee company is engaged in the production of          A
shrimps and tiger prawns, falling under Chapter Sub Heading
No.0301.00 of the Schedule to the Central Excise Tariff Act,
1985 (for short "the Tariff Act"). They imported some capital
goods, viz. sand blowers and air filters, duty free under
Customs Notification Nos. 188/93 dated 27th December 1993          B
and 196/94 dated 8th December 1994 for use in their
integrated Aquaculture project. The imports were subject to the
condition that the said goods would be used in the production
of aquaculture products and 100% or such other percentage
of the said products, as may be fixed by the Board of Approvals    c
for 100% EOU, shall be exported out of India for a period of
ten years or such extended period as may be specified by the
said Board.

      3. As per the Exim Policy (1st April 1992 to 31st March
1997), an EOU Aqua culture unit was permitted to sell upto 50%     D
of its production in value terms in OTA, in accordance with the
OTA sales guidelines notified in that behalf and subject to
minimum value addition.

     4. The guidelines for sale of goods in the OTA by an EOU      E
were prescribed under Appendix XXXlil of the Hand Book of
procedures for the aforementioned period. As per the said
guidelines, sale of goods in the OTA was subject to payment
of applicable duties as notified from time to time by the
department of revenue; the units could opt for OTA sales on a      F
quarterly, half yearly or annual basis with an intimation to the
Development Commissioner of the EPZ concerned; application
for OTA sales was to be accompanied by a statement
disclosing information regarding ex-factory value of goods
produced and of goods actually exported, and the Development       G
Commissioner was to determine the extent pf OTA sales
admissible and issue goods removal authorisation in terms of
value and quantity for sale in OTA.

    5. It appears that during the period 1994-95 to 1997-98,
the assessee produced and sold 11, 15,29,540 number of             H
    746     SUPREME COURT REPORTS                [201 O] 11 S:C.R.


A shrimp seeds and 48,365 Kgs. of shrimps in OTA without
  obtaining the permission of the Development Commissioner;
  without issuing proper invoices as mandated under Rule 1OOE
  of Central Excise Rules, 1944 (for short "the Rules") and without
  payment of Excise Duty. Besides, the assessee also undertook
B certain job work whereby it processed 864.238 MT of shrimps
  and 905.580 MT of fish and ch~ared the said goods in OTA.
  According to the assessee, these goods were ultimately
  exported by the OTA units .

      . 6. On 2nd September 1998, a notice was issued to the
C assessee to show cause as to why duty of excise equal to
  aggregate of the duties of customs, amounting to Rs.
  7,80,58,074/-, should not be levied in terms of Section 3 of the
  Act read with Rule 9(2) read with proviso to sub-section (1) of
  Section 11A of the Act, and interest at 20% from first day of
D the month till the date of payment of duty should not be imposed
  under Section 11AB of the Act. An additional penalty of Rs.
  7,80,58,074/- for non-payment of duty for the reason of wilful
  suppression of facts and contraventions of the provisions of the
  Act, together with additional penalty under Rule 1].3Q(1) for
E contravention of Rule 9(1 ), 1000, 1DOE and 1OOP of the Rules
  for clearing goods without issuance of a proper invoice was
  also proposed to be imposed on the noticee.

      7. The assessee contested the notice on diverse grounds.
F On adjudication, the Commissioner of Central Excise &
  Customs, Visakhapatnam, vide Order-in-Original No. 9/99
  dated 15th April 1999, demanded a duty of Rs.1,83,46,493/-
  on the shrimp seeds, shrimps and fish, cleared by the
  assessee, under proviso to Section 11A of the Act. Interest at
G 20% was demanded on Rs.1, 13,05,410/- as being the duty
  evaded on shrimp seeds, shrimps and fish cleared after 28th
  September 1996 under Section 11 AB of the Act. Penalty of Rs.
  1,13,05,410/-was imposed under Section 11AC of the Act with
  respect to duty evaded since 25th September 1996, and of Rs.
  8,00,000/- under Rule 1730(1) of the Rules.
H
 COMMNR. OF CENTRAL EXCISE, VISAKHAPATNAM v.                747
  NCC BLUE WATER PRODUCTS LTD. [D.K. JAIN, J.]
       8. The revenue as well as the assessee questioned the       A
. correctness of the adjudication order by preferring appeals
  before the Tribunal.

      9. The Tribunal, vide order dated 27th December 2004,
 allowed the assessee's appeal and dismissed the appeal filed      8
 by the revenue. Reversing the order of the Commissioner, the
·Tribunal observed thus:

     "The commissioner, after classifying the shrimp seeds
     under chapter 3, has worked out the amount equal to the
     aggregate of the Customs duty leviable as per proviso to C
     section 3(1) of the CE Act, 1944 and demanded the
     same. It is on record that for clearing the shrimp seeds,
     no permission was taken from the Development
     Commissioner. When the goods are cleared with the
     permission of the Development Commissioner, then only D
     proviso to section 3(1) of the CE Act, would be applicable.
     In Sam Spintex Ltd. Vs. CCE, Indore 2004 (163) ELT 212
     (Tri.-Del.}, it has been held that when U,Jere is a removal to
     OTA without permission of. the competent authority, duty
     is leviable under main section 3 of the CE Act, 1944 and E
     not its proviso. While arriving at the above decision, the
     Hon'ble Tribunal relied on the decision in the case of CCE
      Vs. Pratap Singh 2003 (153) ELT 711 (Tribunal) which has
     been affirmed by the Apex Court vide its order reported
     in 2003 (156) ELT A382. In view of the above decision, F
     .even if the Commissioner's finding on the classification of
      Shrimp seeds is upheld, the duty would be Nil. In that case,·
     the classification issue becomes academic. However,
     after going through the HSN Explanatory notes, we are
     convinced that Chapter 3 would not cover items unfit for G
     human consumption. In the present case, the Shrimp seeds
     are undoubtedly not fit for human consumption in that stage:
     Therefore, it would not be excisable at all. In view of this
     finding, the demand of duty on the Shrimp seeds cleared
     would be not sustainable."
                                                                    H
    748        SUPREME COURT REPORTS             [201 OJ 11 S.C.R.

A In relation to the goods cleared on job work basis, the Tribunal
  held that since goods were cleared to other exporters, there
  was no duty liability and even otherwise, since the permission
  of the Development Commissioner was not obtained, its
  decision in the case of Sam Spintex Ltd. Vs. Commissioner
B of C. Ex., lndore 1 would be applicable. It also held that there
  being no convincing evidence showing suppression of facts, the
  demand itself was time barred.

      10. Being dissatisfied with the order of the Tribunal, the
C revenue is before us in these appeals.

        11. Mr. R.P. Bhatt, learned senior counsel appearing for
  the Revenue contended that since as per Note 1 of Section 1
  of the Customs Tariff Act, 1975, any reference in that Section
  to a particular genus or species of an animal, except where the
D context otherwise requires, includes a reference to the young
  of that genus or species and, therefore, both live shrimps and
  shrimp seeds are classifiable under heading 0306.23 of
  Chapter 3 of the Customs Tariff Act, 1975. Learned counsel
  also submitted that the Tribunal committed an error in relying
E on the decision of this Court in S/V Industries Ltd. Vs.
  Commissioner of Central Excise & Customs2 , because unlike
  in that case, in the present case, the assessee had sought
  permission of the Development Commissioner, who in turn had
  advised them to approach the SIA for permission to clear
F shrimps and shrimp seeds which, in fact, was granted and,
  therefore, they were required to pay duty under proviso to
  Section 3(1) of the Act. It was argued that under the Exim Policy,
  an EOU is obliged to make exports of the entire production
  itself and not through any other entity.

G        12. Per contra, Mr. Joseph Vellapally, learned senior
    counsel appearing for the assessee, contended that the DTA
    sales made by an EOU without approval of the Development
    1.   2004 (163) E.L.T. 212 (Tri.-Del.).
H   2.   2000 (117) ELT 281 (SC).
     COMMNR. OF CENTRAL EXCISE, VISAKHAPATNAM v.              749
      NCC BLUE WATER PRODUCTS LTD. [D.K. JAIN, J.]

Commissioner are to be assessed to Excise Duty under                 A
Section 3( 1) of the Act and not under proviso to the said
Section. In support of the submission, learned counsel placed
reliance on the decision of this Court in SIV Industries (supra)
and orders of the Tribunal in Commissioner of Central Excise,
Jaipur-II Vs. Pratap Singh 3 , Sam Spintex Ltd. (supra) and          B
Modern Denim Ltd. Vs. Commissioner of Central Excise,
Ahmedabad 4 . Learned counsel also submitted that since
shrimp seeds are microscopic post larva of 20 days, which do
not contain meat and as such are not fit for human consumption,
on a plain reading of Chapter Note 1(b) of Chapter 3 of the          c
Tariff Act, these cannot fall within tariff entry 0301.00. It was
argued that for the purpose of the Exim Policy sale of shrimps
by supporting manufacturers carrying out job work and
clearance of the same directly for exports on behalf of other
exporters is to be treated as export sale and therefore,
                                                                     D
clearance of shrimps by the assessee on job work basis could
not be treated as OTA sales for the purpose of the Act. It was
asserted that since there was regular correspondence between
the department and the assessee in relation to these sales and
invoices and other documents were also submitted, there was
                                                                     E
no suppression of OTA sales by the assessee with the intent
to evade payment of duty, particularly when the entire industry
as also the jurisdictional excise authority were under the
impression that no duty was payable on sale of shrimps and
shrimp seeds. In support of the proposition that a mere violation
of rule is not sufficient to invoke extended period of limitation,   F
learned counsel commended us to the decisions of this Court
in Mis Padmini Products Vs. Collector of Central Excise,
Bangalore 5 ; Collector of Central Excise, Hyderabad Vs. Mis
Chemphar Drugs & Liniments, Hyderabad6 and Gopal Zarda
                                                                     G

3.    2003 (153) E.L.T. 711 (Tri.-Del.).
4.    2005 (191) E.L.T. 1174 (Tri.-Mumbai).
5.    (1989) 4 sec 275.
6.    (1989) 2 sec 127.                                              H
    750       SUPREME COURT REPORTS                   [201 OJ 11 S.C.R.

                                                  '
A   Udyog & Ors. Vs. Commissioner of Central Excise, New
    De/hi7.

        13. The core question for our consideration, therefore, is
    whether the sales of shrimps and shrimp seeds by the
    assessee in OT A, without requisite permission from the
8
    Development Commissioner, are to be -assessed to Excise
    Duty under Section 3(1) of the Act or under proviso to the said
    Section?

      14. Before evaluating the rival contentions on the point, we
C may refer to the relevant par1 of Section 3 of the Act, which
  reads as follows :

          "3. Duties specified in the Schedule to the Central Excise
          Tariff Act, 1985 to be levied.-(1) There shall be levied and
D         collected in such manner as may be prescribed duties of
          excise on all excisable goods other than salt which are
          produced or manufactured in India and a duty on salt
          manufactured in, or imported by land into, any part of India
          as, and at the rates, set forth in the Schedule to the Central
          Excise Tariff Act, 1985 :
E
                Provided that the duties of excise which shall be
          levied and collected on any excisable goods which are
          produced or manufactured,--

F                 (i)    in a free trade zone and brought to any other
                         place in India; or

                  (ii)   by a hundred per cent export-oriented
                         undertaking and allowed to be sold in India,

G         shall be an amount equal to the aggregate of the duties of
          customs which would be leviable under Section 12 of the
          Customs Act, 1962 (52 of 1962) on like goods produced
          or manufactured outside India if imported into India, and

H 7.   (2005) a sec 157.
 COMMNR. OF CENTRAL EXCISE, VISAKHAPATNAM v.                   751
  NCC BLUE WATER PRODUCTS LTD. [D.K. JAIN>).]
               .                                          ~

     where the said duties of customs are chargeable by A
   · 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 Customs Act, 1962 (52 of 1962) and the ·
     Customs Tariff Act, 1975 (51 of 1975)".                     B

      15. It is manifest that all excisable goods produced or
manufactured in India are exigible to duty of Excise under
Section 3 of the Act, the charging Section, at the rates set forth
in the Schedule to the Tariff Act. However, proviso to the said        C
Section provides that the duties of Excise on any excisable
goods, which are produced or manufactured by a 100% EOU
and allowed to be sold in India shall be an amount equal to the
aggregate of the duties of customs which would be leviable
under Section 12 of the Custom~Act. 1962. As aforestated,
the controversy at hand is whether in the absence of an order          D
by the competent authority, allowing the assessee to sell the
shrimp seeds and shrimps in India, Excise Duty on such sales
could be levied and collected in terms of the proviso. To put it
differently, the issue relates to the significance of the expression
"allowed to be sold in India" as appearing in clause (ii).to the       E
proviso to sub-section (1) of Section 3 of the Act.

     16. A similar issue fell for consideration of this Court in S/V
Industries (supra). In that case, the assessee was a 100%
EOU. Later on they sought permission to withdraw from 100%             F
EOU Scheme, forwhich the Ministry accorded the necessary
permission: However, some of the goods lying in the unit were
removed prior to the debonding. A dispute arose regarding the
rate of duty payable on such sales. The plea ·taken by the
assessee was that they were liable to pay duty under Section           G
3(1) of the Act together with customs duty on the imported raw
material used in the manufacture of said finished goods, lying
in the stock whereas the stand of the revenue was that Excise
Duty under the proviso to Section 3(1) of the Act was payable

                                                                       H
    752      SUPREME COURT REPORTS                 [201 O] 11 S.C.R.


A on the finished goods with no customs duty being leviable on
  the raw materials used in the manufacture of finished goods.
  Thus, the bone of contention in that case was also with regard
  to the interpretation of the expression "allowed to be sold in
  India" appearing in the said proviso. Interpreting the said
B expression, this Court held that the expression "allowed to be
  sold in India" used in the proviso to Section 3(1) of the Act is
  applicable only to sales made in OT A up to 25% of the
  production by 100% EOU, which are allowed to be sold into
  India as per the provisions of the Exim Policy. No permission
C was required to sell the goods manufactured by 100% EOU
  lying with it at the time the approval is accorded to debond. The
  Court opined that the goods having been sold without
  permission ofthe Central Government to debond the unit, the
  duty on the goods sold by the assessee was leviable under
  main Section 3(1) of the Act.
0
        17. It is pertinent to note that after the decision in S/V
  Industries' case (supra), a Circular was issued by the Central
  Board of Excise & Customs, New Delhi clarifying that prior to
  11th May, 2001, the clearances from EOUs, if not allowed to
E be sold in India, shall continue to be chargeable to duty under
  main Section 3(1) of the Act. For the sake of ready reference
  Circular No. 618/9/2002-CX dated 13th February, 2002 is
  eictracted below:

          "Circular :618/9/2002-CX dated 13-Feb-2002
F
          EOU- Removal of goods by 100% EOU to OTA - Non-
          levy of duty under Section 3(1) of Central Excise Act, 1944
          -Clarifications

G                Circular No. 618/9/2002-CX., dated 13-2-2002

                                          F. No. 268/69/2001-CX.8
                             Government of India
                 Ministry of Finance (Department of Revenue)
H
COMMNR. OF CENTRAL EXCISE, VISAKHAPATNAM v.                 753
 NCC BLUE WATER PRODUCTS LTD. [D.K. JAIN, J.]

          Central Board of Excise & Customs, New Delhi              A
  Subject : Removal of goods by 100% EOUs to OTA -
  Non-levy of duty under Section 3(1) of Central Excise Act,
  1944.

        I am directed to invite reference to Supreme Court's        B
  judgment in case of S/V Industries v. CCE [2000 (117)
  E.L.T. 281 (S.C.) vide which the Apex Court had held that
  "proviso to Section 3(1) regarding the duty chargeable on
  goods cleared by EOUs shall be applicable only to sales
  made in OTA upto 25% of production which are allowed              c
  to be sold into India as per provisions of EXIM Policy". In
  other words, Hon'ble Court decided that if the goods are
  "not allowed" to be sold in India, the proviso to Section 3(1)
  of Central Excise Act, 1944 shall not be applicable. The
  expression 'allowed to be sold' has since been replaced           0
  with 'brought to any other place' w.e.f. 11-5-2001 vide
  Section 120 of Finance Act, 2001 [14 of 2001].

          2. It has come to the notice of the Board that field
   formations are interpreting the judgment of Apex Court to
   the effect that if the goods cleared by EOUs are not allowed     E
   to be sold into India, the Section 3(1) of Central Excise
   Act, 1944 is not applicable and duty can be demanded
   under the provisions of Customs Act, 1962 only. Board has
   taken a serious view of this mis-interpretation. The
   provisions of Central Excise Act, 1944 shall apply to all        F
   goods manufactured or produced in India for which Section
   3 is the charging section. EOUs are also situated in India
   and the chargeability under Central Excise Act is never in
   doubt. Therefore, it is clarified that prior to 11-5-2001, the
   clearances from EOUs if not allowed to be sold in India          G
   shall continue to be chargeable to duty under main Sectio~
   3( 1) of Central Excise Act, 1944. Appropriate action may
   be taken immediately to safeguard revenue and all pending
   decisions may be settled accordingly."
                                                                    H
    754      SUPREME COURT REPORTS                 (201 O] 11 S.C.R.


A                                         (Emphasis added by us)

         18. As aforesaid, according to the Exim Policy 1992-1997
    read with Appendix XXXlll of the Handbook of Procedures, an
    EOU may sell 50% of its production in value terms into a OTA
    only on issuance of a removal authorization by the Development
8
    Commissioner.

         19. In the instant case, admittedly at the time of sales of
    shrimps and shrimp seeds by the assessee in OTA, the
    Development Commissioner had not issued the requisite
C   removal authorization. Therefore, in view of the dictum of this
    Court in S/V Industries (supra), with which we are in respectful
    agreement, and the afore-extracted Circular issued by the
    Board following the said decision, Excise Duty on such sales
    is chargeable under main Section 3(1) of the Act.
D
         20. Having come to the aforenoted conclusion, the
    controversy with regard to classification of the shrimp seeds
    is more in the nature of an academic exercise in as much as
    even if the finding of the Commissioner on classification of
E   shrimp seeds is affirmed, still the duty payable on these goods
    would be nil. For the sake of ready reference, the relevant entry
    in Chapter 3 of the Tariff Act is extracted below:

    "Heading Sub-heading Description of                   Rate of
    No.      No.         goods                            duty
F
     (1)       (2)            (3)                         (4)

    03.01      0301.00        Fish and crustaceans,        Nil"
                              molluscs and other
G                             aquatic invertebrates

        21. Thus, it is evident that even if the stand of the revenue
    is accepted and shrimp seeds are classified under sub-

H
 COMMNR. OF CENTRAL EXCISE, VISAKHAPATNAM v.               755
  NCC BLUE WATER PRODUCTS LTD. [D.K. JAIN, J.]
heading 0301.00 of the Tariff Act, the rate of Excise Duty         A
chargeable would be nil. Similarly, if the Excise Duty payable
is nil, the other question regarding the extended period of
limitation on the alleged ground of suppression of sales also
pales into insignificance.
                                                                   B
     22. For the foregoing reasons, the impugned orders
passed by the Tribunal cannot be flawed and deserve to be·
affirmed. Resultantly, these appeals, being bereft of any merit,
are dismissed accordjngly. No order as to costs.

D.G.                                      Appeals dismissed.