9911796707
TMI Blog2001 (6) TMI 597X X X X Extracts X X X X X X X X Extracts X X X X ..... ai, director Rs. 5 lakhs each. 2. The facts are these. Disco Garments asked the Department for and was granted in December, 1984, a licence under Section 58 of the Act for a customs bonded warehouse at Navsari. It was also permitted to carry out manufacturing operation in the bonded warehouse. This warehouse became necessary as the company had been approved by the Board of Approval of the Government of India to be a 100% export oriented unit for the manufacture of garments. Briefly put, such a unit is permitted to import, on exemption from customs duty raw material and machinery required by it for manufacture of the goods, which it undertakes to export within a specified period. Notification 13/81 issued under Section 25 of the Custom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... though the weight of the goods was also mentioned in the bonded warehouse record, this was approximate. The import export norms of the licensing authority also refer to length of fabric. The licence for the bonded warehouse expressed the maximum quantity of fabrics to be permitted to be kept in terms of metres. 4. The show cause notice arrives at the shortage of fabrics in the following manner : "5. It further appears that while cutting the fabrics into the form of garments of various sizes, the wastage of fabrics occurs. The Disco was having the wastage of fabrics but it was not possible to segregate the wastage of the fabrics of the six bonds in question. Accordingly the normal wastage at 9.7% was taken into consideration looking t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any satisfactory explanation has been tendered by them; as such it appears that they have not utilised fabrics for the intended use. 5. We agree that considered by itself, this is not an ideal way to determine the shortage. Fabrics are traded not in weight but in length and the duty leviable is on their length, if it is not ad valorem. 6. It would however be correct to dismiss the department's case solely on this ground. The importer had, no doubt imported the goods in terms of length. However, it was the same importer who fashioned garments out of these fabrics and other material that he imported and was to export them. The exported garment consisted, we are told by the advocate, solely of safari suits and trousers. Now, any m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s we have recorded, there was no evidence before us again despite out repeated request to show that the quantity on which duty has been demanded had in fact been used in accordance with the terms of notification. In these circumstances, therefore the inability of the department to precisely determine the quantity of fabrics unaccounted for cannot destroy its case. Had the appellant been able to show by its own figure that the department's figures are wrong, it would be a different matter. The continued failure to satisfy the department and failure to satisfy us with regard to the proper utilisation of the fabrics does not leave us any alternative to conclude that these fabrics in fact have not been used in the manner for which they were exe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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