2004 (10) TMI 423 - AT - Central Excise

Summary

Issues:
1. Interpretation of provisions regarding correlation of imports and exports in the EOU Scheme.
2. Validity of demand of duty based on non-correlation of imports and exports.
3. Granting waiver of pre-deposit and stay of recovery in respect of duty and penalty amounts.
4. Request for early disposal of the appeal.

Analysis:

1. The appellants, a 100% Export-Oriented Unit (EOU), imported man-made fabrics duty-free under a specific notification and exported garments to fulfill export obligations. The Commissioner demanded duty of Rs. 87,04,729 for imports not correlated with exports. The appellant argued that one-to-one correlation was not mandatory under the EOU Scheme, citing relevant provisions in the Exim Policy Hand Book (1997-2002) Chapter 6. The appellant also referred to a CBEC Circular clarifying that for homogenous goods, a 'First-In-First-Out' arrangement could be adopted, eliminating the need for strict correlation. The Tribunal found merit in the appellant's argument based on these provisions.

2. Records showed that imports were covered under 31 Bills of Entry, with corresponding exports under a similar number of Shipping Bills. The Tribunal noted that factual correlation could be established at a later stage but acknowledged the appellant's prima facie case supported by the Exim Policy provisions and the CBEC Circular. Consequently, the Tribunal granted waiver of pre-deposit and stay of recovery for the duty and penalty amounts, indicating a favorable stance towards the appellant's position.

3. Both parties requested early disposal of the appeal due to the significant stake involved. The Tribunal accepted this request and scheduled the appeal for expedited consideration on a specific date, prioritizing the case in the cause list. This decision reflects the Tribunal's recognition of the importance of timely resolution in a matter with substantial implications.

In conclusion, the judgment centered on the interpretation of provisions governing import-export correlation for EOUs, ultimately favoring the appellant's argument based on the Exim Policy and CBEC Circular. The Tribunal's decision to grant waiver and expedite the appeal process underscores the significance of the case and the need for efficient resolution.