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Issues:
Violation of para 10/10A of Notifications and Foreign Trade Policy 2004-2009 by importing duty-free raw materials, dispute over whether certain activities constitute manufacturing, permission granted by Development Commissioner for exporting manufactured parts. Analysis: 1. The appellants were required to pre-deposit duty and penalty for alleged violations of Notifications and Foreign Trade Policy. They were engaged in manufacturing activities under EHTP Scheme with a Private Bonded Warehouse License. The Department found discrepancies in their import and export activities, leading to the demand for duty payment and penalty imposition. 2. The main contention of the appellants was that their manufacturing processes involved various activities like inspection, testing, and quality control, which should be considered as manufacturing. They argued that the goods exported were not in the same form as imported, citing Circular No. 314/30/97-CX to support their position. They had already pre-deposited a substantial amount and sought a waiver for the remaining balance. 3. The Department defended its orders, stating that the process of galvanization undertaken by the appellants did not amount to manufacturing but was merely for rust-proofing. They relied on a previous judgment by the Tribunal to support their stance. 4. The appellants countered by highlighting that the exported parts had undergone manufacturing processes and were exported with permission from the Development Commissioner. They argued that the Department was precluded from challenging these exports due to the permission granted. They referred to various judgments supporting their interpretation of the term "manufacture" and requested a complete waiver of the outstanding amount. 5. After considering the arguments, the Tribunal noted that Circular No. 314/30/97-CX recognized galvanization as a manufacturing process. The appellants had obtained written permission from the Development Commissioner for their activities. Given the substantial pre-deposit made and the permission granted, the Tribunal granted a waiver for the remaining balance and stayed the recovery pending appeal disposal, emphasizing that the Revenue should not proceed with recovery even after the stay order expires. 6. The Tribunal's decision was based on the acknowledgment of the manufacturing processes undertaken by the appellants, supported by the permission granted by the Development Commissioner. The waiver granted was in line with previous judicial precedents, and the matter was scheduled for expedited final hearing to address the substantial amounts involved. This detailed analysis covers the key issues and arguments presented in the judgment, outlining the legal interpretations and decisions made by the Tribunal.
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