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Issues:
1. Failure to fulfill export obligation under Notification Nos. 204/92-Cus. and 80/95-Cus. 2. Consideration of benefit of notifications in determining duty demand. 3. Compliance with principles of natural justice in adjudication process. Issue 1: Failure to fulfill export obligation under Notifications: The case involved an appeal against an adjudication order confirming a demand of Rs. 1,33,17,085/- and imposing a personal penalty on the firm for failing to fulfill the export obligation under Notification Nos. 204/92-Cus. and 80/95-Cus. The appellant, M/s. Le Designco, imported Mulberry raw silk under these notifications, intending to use it in the manufacture of garments for export. The revenue contended that the appellant did not meet the export obligation, leading to the demand of duty on the imported silk. Issue 2: Consideration of benefit of notifications in duty demand: The appellant argued that they had used a certain quantity of the imported silk in the manufacture of goods that were subsequently exported, as evidenced by Annexures L to Q. They claimed that this usage entitled them to the benefit of the notifications, which had not been considered by the adjudicating authority. The Tribunal agreed that the appellant should be allowed the benefit of the notifications for the quantity of raw silk used in the exported goods, and not for the total quantity imported. The duty demand was set aside, and the matter was remanded for re-quantification of duty based on the quantity of imported silk used in the specified goods. Issue 3: Compliance with principles of natural justice: The revenue contended that the appellant had not fulfilled the conditions of the notifications as the imported raw silk was not used in the manufacture of specified goods for export. They argued that the adjudicating authority had provided an opportunity for a personal hearing, which the appellant did not avail. The Tribunal noted that the order was not in violation of natural justice principles as the opportunity for a hearing had been granted. The duty was to be re-quantified, and the issue of penalties was to be redetermined by the adjudicating authority while the deposited amount would remain with the revenue during the proceedings. In conclusion, the Tribunal set aside the impugned order, remanded the matter for re-quantification of duty based on the quantity of imported silk used in the specified goods for export, and directed a reassessment of penalties by the adjudicating authority.
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