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Issues involved: The appeal filed by M/s. Nahar Industrial Enterprises questions whether the value of waste should be included in the 50% value of physical export up to which goods can be cleared by a 100% Export Oriented Undertaking to Domestic Tariff Area (D.T.A.).
Summary: Issue 1: Interpretation of Export and Import Policy regarding DTA sales The Appellants argued that waste and rejects are distinct, and waste should not be counted towards the 50% limit of FOB value for DTA sales. They highlighted that Para 9.20 of the Policy did not specify a limit for waste sales until an amendment in 2001. The Tribunal agreed, emphasizing the difference between waste and rejects, and ruled that the amended provision could not be retroactively applied to the Appellants' clearances in 2000-2001. The Tribunal also referenced a High Court decision supporting their interpretation. Issue 2: Application of Circular No. 30/99-Cus. The Revenue contended that all clearances to DTA, including waste, should be within the 50% limit of FOB value. However, the Tribunal found no provision in the Policy during the relevant period supporting this interpretation. They concluded that Circular No. 30/99-Cus. could not be used to demand duty based on waste value for calculating the 50% limit. Conclusion: The Tribunal sided with the Appellants, stating that waste should not be considered rejects and should not count towards the 50% limit for DTA sales. They noted the lack of clarity in the Policy regarding waste sales and emphasized a clarification from the Development Commissioner supporting the exclusion of waste from DTA sales permission. As a result, the impugned order was set aside, and the appeal was allowed.
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