Customs, Excise and Gold Tribunal - Ahmedabad
Goodluck Garments Pvt. Ltd. vs Commissioner Of Central Excise And ... on 26 June, 2006
Equivalent citations: 2006(110)ECC579, 2006ECR579(TRI.-MUMBAI)
ORDER Chittaranjan Satapathy, Member (T)
1. Heard both sides. The appellant is a 100% Export Oriented Unit (EOU) who has been allowed imported fabrics duty free for manufacture of trousers (both adults and boys). The impugned order demands duty of Rs. 17,44,818.23 (Rupees Seventeen lacs, Forty Four Thousand, Eight Hundred Eighteen and Twenty three paise) on the ground that the appellant has consumed excess fabric measuring 32185.06 Sq.Mtrs. over and above the quantity allowed as per Input-Output norms. In addition, a penalty of Rs.35,00,000/-(Rupees Thirty Five lacs) has also been imposed on the appellant under Section 112 of the Customs Act, 1962.
2. The learned Counsel appearing for the appellants states that while broducing the trousers, the unit also consumed extra quantity of fabrics as wastage and the same has not been allowed by the adjudicating Commissioner. In support, he produced a copy of a letter dated 18.01.2001, issued by the Joint Development Commissioner, Kandla Free Trade Zone, which states that pending fixation of wastage no/rns, an- ad hoc wastage norm of 15% of the inputs has been fixed and that such fixation would be valid for six months from 19.01.2001 to 18.07.2001. According to the learned Counsel, in view of the said letter dated 18.01.2001, the appellant unit is entitled to 15% of extra fabrics duty free over and above the norm of 1.687 sq. mtrs. per troussr fixed under Input-Output norms. The learned DR appearing for the Revenue justifies the impugned order stating that the norm of 1.687 sq. mtrs. fixed under the Input-Output norms, has taken into account the possible wastage in manufacturing a trouser and there is no provision for allowing wastage over and above the quantity prescribed under the Import Policy. He also states that in letter from the Joint Development Commissioner produced before the Tribunal was not produced before the adjudicating authority and in fact the same has been issued after the date of personal hearing before the adjudicating Commissioner and in any case, this relates to the period 19.01.2001 to 18.07.2001 whereas the period in dispute in the current appeal is from 25.12.1994 to 24.12,1996.
3. After considering the argument from both sides, we find that the norms prescribed for trousers is 1.687 sq.mtrs. per trouser and the appellants have not: been able to show us any statutory order which allows wastage over and above the norm prescribed for the trouser. The exemption granted under Notification 13/81 dated 9.2.1981 allows an Export Oriented Unit to import raw material duty free for the purpose of expor t production and the quantities of fabrics allowed under the same obviously allows the wastage occurred while manufacturing the export product(trouser in this case) . We also find that the adjudicating Commissioner has taken into account all the nine cases of import and in each case import has allowed duty free import as per the Input-Output norms at the rate of 1.687 sq.mtrs. per trouser and has thereafter come to the conclusion that the unit has consumed 32185.06 sq. mtrs in excen We find that the action taken by the adjudicating Commissioner demanding dutyon the excess fabric is totally justified as the same is in,excesses of what allowed under the law. Hence,we are of the view that the impugned order requires no interference. As regards the penalty, we find that the penalty imposed is Rs.35,00,000/-(Rupees Thirty Five lacs) whereas the duty confirmed is only 17,44,818,23(Rupees Seventeen Lacs, Forty Four Thousand, Eight Hundred and Eighteen and Twenty Three paise). Considering the totality of the facts and circumstances of the case, we are of the view that the penalty imposed is excessive and we reduce the same to Rs. 8,00,000/ - (Rupees Eight Lacs only).
4. The appeal is party allowed by reduction of the penalty.
(Dictated and pronounced in open Court)