Order date – 13 January 2023

Parties: Sun Pharmaceuticals Industries Ltd Vs C.C.E-Bharuch

Facts –

• The Appellant, Sun Pharmaceuticals Industries Ltd is engaged in the manufacture of Bulk Drugs falling under chapter 29 of the Central Excise Tariff Act., 1985. They are registered as 100%EOU. 
• During the course of audit, the officers observed that the value of DTA sales during the year 2012-13 and 2013-14 by the appellant was more than 50% of FOB value of physical exports made during these years. Accordingly Show Cause Notice dated 09.03.2006 was issued demanding short payment of excise duty along with interest and penalty.

Issue –

• Whether the DTA sales entitlement can be availed more than 50% ?

Order –

• The Tribunal held that as per Appendix -14-I-H of Handbook of Procedure which provide the guidelines for sales of goods in the Domestic Tariff Area (DTA) by the EOU /EHTP/STP/BTP units, if DTA sale entitlement is not utilized within same year then it can be carry forwarded and can be utilized in the next two years. The said Appendix 14-I-H clearly provides that the DTA sales entitlement shall be availed of within three years of the accrual of entitlement.
• Further the condition of notification only restricted that the clearance into DTA is not more than of 50% of the Free on Board value of exports made during the year. The appellant have correctly utilized the carry forwarded balance which was valid upto three years from its accrual.
• Hence the appeal is allowed.