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Issues:
1. Duty demand on unused imported material in the manufacture of exported products. 2. Burden of proof on the importer for exemption fulfillment. 3. Presumption of exported goods made from imported raw material. 4. Verification of stock and inspection discrepancies. Analysis: 1. The case involved a firm licensed as a 100% export-oriented unit importing steel sheets. The department alleged that a portion of the imported material was unused in the manufacture of exported products, demanding duty. The Assistant Collector confirmed the duty demand, which was later remanded back by the Collector (Appeals) for verification. The Commissioner (Appeals) found one coil of imported material unused and demanded duty only on that portion, which was challenged by the department. 2. The department contended that the burden of proving exemption fulfillment lies with the importer. The Commissioner (Appeals) was criticized for not considering that using indigenous raw material could be more economical due to exemption from Central Excise duty. The department argued that the importer failed to prove the fulfillment of exemption conditions, leading to the duty demand. 3. The issue of presuming that exported goods were made from imported raw material was raised. The argument based on the sequence of material receipt in the warehouse was rejected. The tribunal emphasized that the onus was on the importer to demonstrate the utilization of imported raw material in the exported products, dismissing the presumption and the application of the "first in first out" principle. 4. Discrepancies in stock verification and inspection were addressed. Despite multiple inspections and record verifications, the respondent failed to prove the utilization of imported goods in the manufacture of exported products, except for one coil. The tribunal concluded that the duty demand on the unused imported material was justified, except for the specified portion where duty had already been demanded by the Commissioner (Appeals). In conclusion, the appeals were allowed, and the duty demand on the unused imported material was upheld, except for the specific portion where duty had already been imposed. The tribunal emphasized the importer's burden to prove exemption fulfillment and the necessity to provide evidence of utilizing imported material in the exported products.
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