1. 00. The writ applicant No. 1 is a 100% Export Oriented Undertaking. It seeks to challenge the legality and validity of the order dated 10/06/2019 passed by the Additional Commissioner, Central GST and Central Excise, Vadodara-I – Annexure-N to the petition. The Operative part of the order reads as follows :-

“ORDER

(i). I confirm the demand of duty amounting to ₹ 89,54,178/- (Rs. Eighty Nine Lacs Fifty Four Thousand One Hundred Seventy Eight Only) and order to recover the sum from M/s. Asahi Songwon Colors Ltd. (100% EOU), Block No. 429-432, ECP Channel Road, Vill, Dudhwada, Tal. Padra, District Vadodara under section 11A(10) of Central Excise Act, 1944 read with section 174 of CGST Act, 2017.

(ii). I order for recovery of interest at appropriate rate on the amount confirmed at (i) above, from M/s. Asahi Songwon Colors Ltd. (100% EOU), Block No. 429-432, ECP Channel Road, Vill, Dudhwada, Tal. Padra, District Vadodara under section 11AA of Central Excise Act, 1944 read with section 174 of CGST Act, 2017; and

(iii). I impose a penalty of equal amount confirmed at Sr. No. (i) above under section 11AC(c) of Central Excise Act, 1944 read with section 174 of CGST Act, 2017 on M/s. Asahi Songwon Colors Ltd. (100% EOU), Block No. 429-432, ECP Channel Road, Vill, Dudhwada, Tal. Padra, District Vadodara. However, as provided under section 11AC(e) of the Central Excise Act, 1944, where the duty determined at (i) above and interest thereon is paid within 30 of receipt of this order, the penalty shall be twenty five per cent of the penalty imposed above, subject to the condition that such reduced penalty is also paid within such period. ”

2. 00. It appears from the materials on record that the writ applicant No. 1 is engaged in the business of manufacturing excisable goods like Beta Blue etc.

3. 01. The case of the department is that in the course of the audit by CERA, it was revealed that the writ applicant had sold Beta Blue, Beta Blue-A & Beta Blue-B in DTA to the tune of ₹ 13,43,98,243/- during the period between April, 2013 and June, 2017 by wrongly availing the benefits of the concessional rate duties under the Notification No. 23/2003-C. E. Dated 31/3/2003. To put in other words, the case of the department is that the assessee being a EOU is guilty of availing benefits of concessional rate of duty without any prior permission of the Development Commissioner, KASEZ, Gandhinagar for manufacturing.

3. 02. On the other-hand, the case of the writ applicants is that the proceedings came to be initiated under an erroneous impression that no permission has been accorded by the Development Commissioner for manufacturing.

3. 03. Mr. Dave, the learned counsel appearing for the writ applicants invited the attention of this Court to Annexure-B page 44. According to Mr. Dave, Annexure-B is the permission which was granted by the Development Commissioner dated 3/3/2004 and it has been extended from time to time.

3. 04. Mr. Dave, also invited the attention of this Court to Annexure-E page 57 of the Paper Book. Annexure-E is a letter dated 2/11/2007 addressed by the Deputy Development Commissioner, Kandala, Special Economic Zone to the writ applicants, whereby the writ applicants were informed that the permission to manufacture and export pigment was being granted.

3. 05. Mr. Dave, further pointed out that the writ applicant No. 1 has been manufacturing such goods from October, 2007 and were permitted to export such goods by the office of the Development Commissioner and the Foreign Exchange earned as price of such goods was also taken into consideration by the office of the Development Commissioner as net foreign exchange earning. In short, the submission of Mr. Dave is that the Additional commissioner had no jurisdiction to proceed on the basis that the writ applicants had not obtained the necessary permission from the Development Commissioner to manufacture such goods.

4. 00. In view of the above, let Notice be issued to the respondents returnable on 16/10/2019.

Having heard Mr. Dave, learned counsel appearing for the writ applicants and having gone through the materials on record, we are of the view the writ applicants have been able to make out a strong prima facie case to have an interim order in their favour, in terms of para 18(C). We accordingly grant such relief.

Direct Service is permitted.