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Issues:
Appeal against rejection of duty drawback claim for goods manufactured in 100% EOU, violation of Notification No. 67/98-Cus. (N.T.), demand of drawback, interest, and penalty under Customs Act. Analysis: 1. The appellant, a DTA unit, exported garments using spare capacity of a 100% EOU, M/s. Karle International. Claimed drawback under Entry 62-01 of Notification 67/98-NT Customs. Commissioner rejected claim citing proviso 2(c) of the Notification. Appellant argued that using EOU's capacity doesn't bar drawback claim. No suppression of facts as Customs officers verified manufacturing. Mentioning EOU as manufacturer in shipping bills not done, but appellant relied on circulars permitting DTA units to utilize EOU capacity. Claimed circulars clarify eligibility for drawback and no violation of law. Contention against penalty imposition under Customs Act Sections 113 and 114. 2. Advocate cited Circulars 66/98-Cus., 67/98-Cus., and 74/99-Cus. permitting DTA units to file shipping bills when goods manufactured in EOU. Referring to Leela Scottish Lace Ltd. case, argued in favor of appellant's case. JCDR contended suppression by not mentioning EOU manufacturing in shipping bill. Commissioner's findings supported by JCDR. 3. Tribunal noted goods manufactured in EOU's spare capacity by DTA unit. Circulars allowed such activity without specific prohibition. Circulars clarified DTA exporters' eligibility for drawback. Appellant provided export proof and bond. Tribunal referred to Leela Scottish Lace Ltd. case and Circulars 74/99-Cus. and 67/98-Cus. supporting appellant's claim. No suppression or illegitimate claim found. Appellant's claim adjudicated correctly as per Circulars and Notification. Impugned order set aside, appeal allowed.
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