Customs, Excise and Gold Tribunal - Mumbai
Goodluck Garments Pvt. Ltd. vs Commissioner Of Cus. & C. Ex., Surat-Ii on 21 January, 2002
Equivalent citations: 2002(143)ELT598(TRI-MUMBAI)
ORDER J.H. Joglekar, Member (T)
1. This application is for waiver of pre-deposit of Rs. 17,44,818.23 and penalty of Rs. 35 lakhs. The facts leading to the impugned order are as follows :
2. The applicants are a 100% EOU manufacturing readymade garments. In the manufacture of such garments namely, trousers, certain waste and trimming had arisen which had been destroyed in the presence of the jurisdictional officer. Jurisdictional officers studied the input-output norms, and compared the wastage generated with the norms. It was found that the waste generated was significantly higher than what the norms indicated. The duty referred to above was computed and demanded vide the show cause notice. After hearing the assessees the demand was confirmed and the penalty imposed. The EOU, hence, filed the appeal and the present application for waiver and stay.
3. The goods were imported under Notification 13/81. We have seen the text of this notification. The notification permits import of raw materials free of duty "when imported into India for the manufacture of articles for export out of India". The notification accepts that scrap or waste material may arise during such manufacture and provides for clearance thereof according to law with the prescription that such percentage of scrap or waste should not exceed the percentage fixed in this regard by the Board of approvals. The notification, however, does not render the raw materials imported and contained in such waste in excess of the norms ineligible for the benefit of notification. In other words, the criteria for the generation of waste and scrap is not a pre-condition for the benefit of the said exemption.
4. Counsel shows us certain judgments following the law laid down by the Tribunal in the case of Vishal Footwear Ltd. v. CCE, New Delhi - 1999 (114) E.L.T. 60. In this case reference was invited to Circular No. 21/95, dated 10-3-1995. The field officers were cautioned that in the event of non-export of the goods where the conditions of the notification are seen not to have been fulfilled notice for recovery should issue but the demand not to be confirmed until a positive finding was made by the Development Commissioner. This was because the Development Commissioner had the authority to extend the period during which the export should be made. Where such extension was granted, the process for the demand itself would cease to exist.
5. In the present case, the Counsel submits that at a latter date for a latter period the norms for utilisation of the raw materials as fixed by the Board was relaxed and ad hoc waste norms were fixed at 15% of the imports vide letter dated 18-1-2001 by the Development Commissioner, KFTZ. It is correct that the extension does not relate to the period before us but the ratio of Vishal Footwear Ltd. v. CCE would stand attracted.
6. At the present stage, we find that in the absence of any specific linkage between the norms and the benefit of the subject notification the. ap-
plicants have made out a prima facie case. We, therefore, grant prayer of waiver and stay as made without any conditions.