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2006 (9) TMI 397 - AT - Central Excise
Issues:
1. Denial of DTA benefits based on the type of yarn sold. 2. Interpretation of "similar goods" for DTA sale entitlement. 3. Discrepancy in item composition for DTA clearance. 4. Prima facie case for waiver of duty and penalty. Issue 1: Denial of DTA benefits The appeal was filed against the denial of DTA benefits to the appellant due to selling "synthetic yarn" instead of "cotton yarn and synthetic yarn" as permitted. The Commissioner (Appeals) focused on the raw material used in the synthetic yarn, which was not a condition in the permission letter. The Commissioner acknowledged the ambiguity in interpreting "similar goods" or "goods belonging to the same class." Issue 2: Interpretation of "similar goods" The argument presented was that DTA sale entitlement is based on the previous year's performance, not the year of sale. Referring to a previous Tribunal decision, it was emphasized that the Development Commissioner's approval of the product was crucial, and demands based on EXIM Policy required seeking the Development Commissioner's opinion. The Tribunal held that the demand was not sustainable, leading to the waiver of duty, penalty, and interest. Issue 3: Discrepancy in item composition The respondent contended that the item cleared in DTA differed from the exported item due to composition. However, the Development Commissioner's opinion, as per CBEC circulars, was not provided. The lack of this essential opinion weakened the respondent's argument regarding the composition discrepancy. Issue 4: Prima facie case for waiver After considering both sides and examining the case record, the Tribunal found a prima facie case in favor of the appellant for a total waiver of duty demanded in the impugned order. An interim stay without pre-deposit of duty and penalty was granted, along with the waiver of the penalty on the General Manager until the final hearing. The appeal was scheduled for final hearing in due course, with both applications disposed of accordingly.
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