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TMI Blog2006 (6) TMI 425X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The issue of the demand is anchored on the following wordings of Para 9.24 of Handbook of Procedures 1997-2002. " If a unit manufactures and exports several products, bunching of such products for disposal in the DTA may be permitted provided that the total sale effected is within the overall ceiling. DTA sale of an individual item in a bunch shall, however, not exceed the normal percentage entitlement for that item as provided under Paragraph 9.9(b),(c) and (d) of the Policy plus fifteen percent. An EOU/EPZ/EHTP Unit may bunch the product manufactured by it for the purpose of DTA sale within the six digit HS Code". The six digit HS Codes are ITC HS codes list, appended to the EXIM Policy 1997-2002, is for the 'import goods' and is aligned with the Customs Tariff. The products manufactured and sold into the DTA by the assessees are Cotton Yarn, Poly Cotton Yarn, Poly Viscose Yarn and Polyester Yarn, which are listed in the HS Code as 5205.11, 5509.99, 5509.99 and 5509.99 respectively. The clearances into DTA of Poly Viscose Yarn and Polyester Yarn were 101.96% and 90.04% respectively, of the quantities manufactured. Demands were thus raised for the duty involved on the quantitie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te, has clarified "M/s. Sanghi Spinners Ltd.'s, approved item of manufacture is 'Spun Yarn Cotton, Synthetic and Blends'. Here the 'Spun Yarn' is to be taken as a Broad item of manufacture which is made out of cotton, synthetic blends and each type of spun yarn cannot be differentiated as an independent product for the purpose of DTA sale permission. If the product is other than 'spun yarn' like cotton fabric etc. which is also one of the permitted product of EOU under Broad Banding, it can be objected for DTA sale under bunching of products in view of amended provision for bunching of DTA sale under bunching of products in view of amended provision for bunching of DTA sale in terms of Para 6.8(c) of HandBook of Procedures. The 'spun yarn' itself has to taken as whole in its totality and bunching of DTA sale of the 'Spun yarn synthetic blends' which is the approved item of manufacture may be allowed under Bunching of products." 24. From the above letters of clarifications/opinions of the Development Commissioner's Office, it is inferred that the products, 'Cotton Yarn, Poly Cotton Yarn, Poly Viscose Yarn and Polyester Yarn', though falling under different HS Codes, are treate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ., New Kandla - 2001 (130) E.L.T. 236 (Tri. - Kolkata). * "Demand - 100% EOU - No intimation given to Development Commissioner prior to Adjudication in compliance of Circular No. 21/95 - Cus., dated 10-3-95 and 122/95 dated 28-11-95 - No evidence relied as regards the sales effected in DTA -Demand under Section 3(1) of the Central Excise Act, 1944, not sustainable". - 2001 (132) E.L.T. 214 (Tri. - Bang) - Kuntal Granites v. Commr. of Central Excise, Bangalore. * "Matter against EOU to be adjudicated only after referring to the Development Commissioner - Section 122 of the Customs Act, 1962". - 2001 (133) E.L.T. 483 (Tri. -Ban.) - ABN Granites Ltd. v. Commr. of Customs, Cochin. * "The Board's Circular 21/95-Cus., dated 10-3-95 makes it clear that even in the event of failure to make or continue exports, the Development Commissioner's recommendation is required before duty demands can be confirmed by the Customs Authorities." -1999 (114) E.L.T. 60 (Trib.) - Vishal Footware Ltd. v. Commissioner of Customs, New Delhi. * "Prima facie, Depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessees is a single item 'Spun Yarn Cotton, Synthetic and Blends', and have also approved their clearances as correct. The CBEC Circulars dated 10-3-95 and 28-11-95 direct that the Development Commissioner's opinion/contentions are to be sought before confirming demands based on the EXIM Policy. The Tribunals vide various judgments as mentioned in para 24 above have also reiterated the same. The Ministry of Commerce, Govt, of India, have done away with the policy of bunching of products within the six digit HS code, with effect from April 1998. In view of this I hold that the demand raised under sub-section (1) of section 11A of the Central Excise Act, 1944 is not sustainable. The main demand being not sustainable it follows that other charges viz. Penalty under Section 11AC and rule 209, interest under Section 11AB and personal penalties under 209A, also do not merit to be considered. 29. In view of the above I pass the following order: ORDER I drop further proceedings in this case." The Revenue is aggrieved with these findings and contended that the Development Commissioner was not justified in granting permission in terms of the EXIM Policy which is a different parame ..... X X X X Extracts X X X X X X X X Extracts X X X X
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