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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 ..... om the present respondent as ordered by the adjudicating authority was not justified. The Commissioner (Appeals), while setting aside the recovery of duty on inputs and penalty imposed in that connection, reduced 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocurement of such goods was recoverable under Section 11A of the Act with interest. It was held that under Circular No. 67/98- us. dated 14-9-98, after the job work, the respondent-EOU/job worker was required to export 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dustries had exported the goods under the DEPB scheme, which was not admissible on these goods, since they were manufactured by the EOU. Thus, in this case, the respondent - EOU had not paid any duty on the inputs and by 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 subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by itself would not amount to an attempt to export and would only be a preparation to export. 7. It is evident from the material on record, that the respondent had not taken permission of the Assistant Commissioner to do the 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 Custo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -Cus. dated 14-9-98 on the sub-contracting issue and in Paragraph 4 thereof it was provided as under "4. Further to utilize the idle capacity of the EOU/EPZ units, it has also been decided that the EOU/EPZ units in textile, readymade garments, 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 requi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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