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TMI Blog2011 (6) TMI 647X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose of remand. Consequently, the original authority under the FTDR Act is required to reconsider the question whether the advance licences were liable to be cancelled. Commissioner could not have taken the final view that the advance licences were valid at the time of importation. For these reasons, the learned Commissioner’s order is prima facie unsustainable and its operation is liable to be stayed. Stay application allowed X X X X Extracts X X X X X X X X Extracts X X X X ..... umentary evidence of discharge of export obligation was required to be produced by the importer to the satisfaction of the proper officer of Customs within the prescribed period as per Condition (vi). Condition (vii) prohibited transfer/sale of the advance licence and the materials. The term "materials" was defined under Explanation (iii) to the Notification and, accordingly, the term meant raw materials, components, intermediates, consumables, catalysts and parts which were required for manufacture of the resultant product. The demand of duty dropped by the Commissioner was on zinc dross imported by the respondent after discharge of export obligation under the advance licences. These materials were used in the manufacture of zinc oxide (resultant product) and this product was removed to the domestic market. According to the department, such removal of resultant product was also forbidden under the Exemption Notification. According to them, the entire quantity of resultant product, whether before or after fulfilment of export obligation, should be physically exported. On the other hand, according to the respondent, once the export obligation was discharged fully, they were at liber ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a few other Notifications issued under the DEEC Scheme from time to time. He also refers to a few decisions of this Tribunal, wherein those Notifications were considered. A few decisions cited by the learned counsel are ITC Ltd v. Commissioner - 2003 (153) E.L.T. 366 (Tri. - Chennai), Commissioner v. Cheminor Drugs Ltd. - 2003 (160) E.L.T. 649 (Tri. - Bang.), Jay Engineering Works Ltd. v. Commissioner - 2003 (162) E.L.T. 680, Galaxy Surfactants Ltd v. Commissioner - 2006 (202) E.L.T. 495 (Tri. - Mum.) etc. The learned counsel has claimed support from these decisions of the Tribunal to his proposition that no condition of Exemption Notifications No. 93/2004-Cus. and No. 94/2004-Cus. can be said to have been violated by the respondent by the domestic clearance of the resultant product manufactured out of zinc dross imported after fulfilment of export obligation. He has also invited our attention to para 4.1.5 of the Foreign Trade Policy 2004-05, which reads thus : "Advance Licence and/or materials imported thereunder shall not be transferable even after completion of export obligation. However, the licence will have the option to dispose off the product manufactured out of the du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the conditions of the Exemption Notification. When the resultant product is exported, it is called "export product". Thus, it would appear from the above provision of the Policy that every quantity of input imported under an advance licence should be physically present in the export product, which would mean that the final product manufactured out of the imported input should invariably be exported. Prima facie, we cannot read and understand para 4.1.3 of the Foreign Trade Policy in any different way. 7. Coming to the Exemption Notification, condition (ii) say that, where the imports take place after fulfilment of export obligation, the Shipping Bill particulars including the quantity and FOB value of the resultant product are to be endorsed on the licence. It is further provided that, where the import takes place before fulfilment of export obligation, the quantity or FOB value of the resultant product to be exported are to be endorsed on the said licence. Obviously, the particulars to be endorsed on the advance licence at the time of import of raw material after fulfilment of export obligation are those of the resultant product already exported in discharge of export obl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was entitled to clear the subsequent production of resultant product to the domestic market instead of physical export. This question needs to be examined in the light of the relevant conditions of the Exemption Notifications. To our mind, the conditions of Notifications No. 93/2004 and 94/2004 would require the licensee under the DEEC Scheme to export the resultant product manufactured out of his imports even after discharge of export obligation. Contextually, it is pertinent to note that the respondent admitted their liability under Section 108 of the Customs Act. They also paid an amount of Rs 1.12 crores towards duty liability arising out of breach of conditions of the aforesaid Notifications. We are told that a refund application of the respondent is pending with the department and that is the reason why they are making the present stay application. 10. On a perusal of the impugned order, we have found many an infirmity therein. Even the Serial numbers of the conditions of the Notifications referred to by the learned Commissioner are apparently erroneous. The learned Commissioner has ventured into interpretation of expressions like "used in", "actually used", and "requir ..... 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