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TMI Blog2007 (3) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... educed the penalty imposed under Section 117 of the Customs Act, 1962 to Rs. 5,000/- which part of the order has not been challenged by the respondent. 2. The respondent is engaged in the manufacture of grey fabric/cotton terry towel and also doing job work for other units. The respondent had not obtained any permission for the job work on behalf of the DTA exports in terms of Circular No. 67/98-Cus. dated 14-9-98. However, the respondent has undertaken the job work of grey fabric/cotton terry towel of M/s. Kapoor Industries, Panipat, a DTA unit. The respondent an EOU unit, did not pay duty on the consumables and fuel used in the job work and cleared the goods to the said DTA unit. According to the Revenue, by such conduct the respondent h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port the goods itself. In the present case, the respondent EOU did not export the goods but cleared them to the DTA unit namely. M/s. Kapoor industries which was against Paragraph 6.15 of the Exim Policy 2002-2007. 4.1 The Appellate Commissioner, however, taking note of the fact that goods on which job work was undertaken by the appellant had been exported by M/s. Kapoor Industries, as report by the Range Officer on 16-12-2004 it. during the pendency of the appeal, held that since the manufacturer who exported the goods could take rebate on the raw material used in the goods under Rule 18, the revenue effect was "nil". It was also held that under Rule 19, the inputs used in the export goods could be removed without payment of duty and ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clearing the goods to the DTA unit. M/s. Kapoor Industries, the respondent provided them a chance to obtain DEPB against such goods by exporting them under DEPB scheme. There fore, the duty foregone on the goods was recoverable from the respondent and penalty was imposable under Rule 25 of the said Rules. 6. The learned authorized representative for the respondent strongly contended that the unit had already intimated the department about the job work and such job work was permitted to be done by the respondent. He submitted that since the DTA unit could have claimed either rebate under Rule 18, or duty exemption in respect of inputs under Rule 19(2), the revenue effect was absent and therefore, the Commissioner had rightly decided the iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e job work. Apart from that, the respondent having done the job work had sent back the goods to the DTA unit M/s. Kapoor Industries, and admittedly did not export the goods itself. 7.1 The Exim Policy of the year 2002-2007 made the EOUs eligible for the benefits on their undertaking to export their entire production of goods barring permitted of sales in the DTA. Paragraph 6.15(b) of the Policy which has a bearing on the present case reads as under :- (b) EOU may, on the basis of annual permission from the Customs authorities, undertake job work for export, on behalf of DTA, exporter, provided the goods are exported directly from EOU and export document shall jointly be in the name of DTA/EOU. For such exports, the DTA units will be entit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rments, agro-processing and granite sectors may be permitted to undertake job work from the DTA units provided the finished products produced by such EOU/EPZ units will be exported directly from EOU/EPZ units itself and these goods will not be sent back to the DTA". 8. It will be seen from the above provisions that in order to claim the exemption benefit of the Notification No. 22/03-Cus, a substantive uniform condition imposed was that the disposal of the goods manufactured by the job worker was required to be done as per the Exim Policy. The Exim Policy required that the EOU undertaking job work should export the goods directly. Such requirement of direct export by the EOU was in consonance with the purpose of the policy, which required ..... X X X X Extracts X X X X X X X X Extracts X X X X
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