2007 (3) TMI 169 - AT - Central Excise

100% EOU cleared bath robe in DTA without getting permission from D.C. and without payment of duty Demand raised by adjudication authority is not sustainable because no reference is made to the Development Comm. before adjudicating the case

Summary

Issues:
1. Recovery of duty and other dues from a 100% EOU without due clarification from the Development Commissioner.
2. Clearance of goods without permission for clearance in DTA and without payment of duty.

Issue 1 - Recovery of duty and other dues from a 100% EOU without due clarification from the Development Commissioner:
The case involved a revenue appeal against an order passed by the Commissioner setting aside demands raised against a 100% EOU manufacturing readymade garments and textiles. The Commissioner found that the action to initiate recovery of duty and other dues without due clarification from the Development Commissioner was bad in law. The Commissioner emphasized the need to seek clarification from the Development Commissioner before taking recovery proceedings against a 100% EOU for failing to fulfill export obligations. The Commissioner referred to relevant circulars and tribunal orders to support the decision to set aside the demands raised against the EOU. It was noted that the procedure of seeking clarification from the Development Commissioner was not followed in the instant case, leading to the impugned order being set aside based on established legal principles and precedents.

Issue 2 - Clearance of goods without permission for clearance in DTA and without payment of duty:
The Revenue argued that the assessee had cleared capital goods without permission and entered into job work without intimation to the department, seeking confirmation of the entire amount related to the DTA sale. However, the Commissioner had already confirmed demands related to the item sold without permission and without payment of duty. The Commissioner's order was upheld, emphasizing that demands cannot be confirmed without reference to the Development Commissioner. The Tribunal citations were cited to support the decision, and it was concluded that the impugned order was in line with the judgments discussed, leading to the rejection of the appeal.

In conclusion, the judgment highlighted the importance of following proper procedures and seeking clarification from the Development Commissioner before initiating recovery proceedings against a 100% EOU. The decision to set aside demands in the absence of such clarification was supported by legal principles and precedents, ensuring adherence to established norms in customs matters.