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2018 (6) TMI 977 - AT - Central Excise100% EOU - removal of certain quantity of Poly Wool waste and All Wool waste to Domestic Tariff Area (DTA) in terms of para 9.9(a) of EXIM Policy, 1997-2002 - the lower authorities have sought to apply provisions of paragraph 9.9(b) of the Policy to the clearance of polywool waste and all wool waste - Held that - Tribunal in the case of Nahar Industrial Enterprises Ltd. 2003 (2) TMI 97 - CEGAT, NEW DELHI has held that the Board s Circular No. 30/99-Cus., dated 25-5-99 cannot be made the basis for demanding duty from the Appellants after including the value of waste for the purpose of computing 50% limit of the FOB value for the purpose of sale to DTA. The impugned order relies on the amendment made in Policy on 1.4.2001 to confirm the demand and penalty - there is no merit in the impugned order - appeal allowed - decided in favor od appellant.
Issues:
Confirmation of demand and imposition of penalty on M/s Indoworth India Ltd. for removing Poly Wool waste and All Wool waste to Domestic Tariff Area (DTA) in terms of EXIM Policy. Analysis: The appeal was filed against the confirmation of demand and imposition of penalty on M/s Indoworth India Ltd. for removing Poly Wool waste and All Wool waste to Domestic Tariff Area (DTA) in accordance with the EXIM Policy. The appellant argued that they are a 100% Export Oriented Unit (EOU) and had removed the waste to DTA paying 50% of the Basic Customs Duty (BCD) leviable under similar goods imported into India. The matter had been previously remanded to the original authority for fresh consideration. In the subsequent proceedings, the demand was confirmed again, and penalty was imposed under Rule 173Q. The main issue was whether the exemption under Notification No. 2/95 dated 4.1.1995 was available for clearance to DTA without a certificate from the Development Commissioner. The appellant contended that the issue was covered by a Tribunal decision and that the waste sale should not be counted against the DTA sale entitlement under the EXIM Policy. The lower authorities applied provisions of paragraph 9.9(b) of the Policy to the clearance of waste, which the appellant argued was not applicable before 1.4.2001. The Tribunal analyzed the nature of the waste being cleared to DTA and distinguished between waste and rejects, citing definitions from dictionaries and the Policy itself. The Tribunal agreed with the appellant that the amended Policy could not be retrospectively applied to clearances made before the amendment. The Tribunal also referenced a High Court decision and a clarification from the Development Commissioner to support its conclusion that the waste sale should not be included in the DTA sales permission. Consequently, the impugned order, which relied on the 2001 Policy amendment to confirm the demand and penalty, was set aside, and the appeal was allowed. In conclusion, the Tribunal found no merit in the impugned order that confirmed the demand and penalty against M/s Indoworth India Ltd. for removing waste to DTA. The Tribunal held that the amended Policy could not be applied retrospectively, and the waste sale should not be considered for DTA sales entitlement. The appeal was allowed, and the impugned order was set aside.
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