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TMI Blog2016 (2) TMI 246X X X X Extracts X X X X X X X X Extracts X X X X ..... est Block-II, R.K. Puram ( CEGAT ) dismissing the Petitioner s Appeal No. C/446/92-B2. By the said order, the CEGAT upheld the orderin- original dated 24th January, 1992 passed by the Additional Collector of Customs holding that the Petitioner had not fulfilled the norms in terms of the Notification No.117/88-Customs dated 29th March, 1988 in respect of fulfilment of the export obligations under the Import Export Pass Book Scheme. 2. In terms of Chapter XX of the Import and Export Policy of the Government of India for the period April, 1988 to March, 1991, an Import and Export Pass Book Scheme was introduced in order to provide duty free inputs to manufacturer-exporters and export/trading houses for production of goods for export. The scheme provided eligible exporters the facility of duty free raw materials and samples required for the manufacture of an export product. Para 257 (2) of the Import Export Policy stated that the exemption under the Import Export Passbook issued under the Scheme would be governed by the Department of Revenue Notifications as reproduced in Appendix 14-B and 13-B. In terms of the Scheme, if an exporter had a firm contract, it could approach the lice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ach Pass Book licence. 5. The products listed in Appendix 14-A which are relevant for the purposes of this petition, are as follows: Sl. No. Description of Exports Products Relevant Sl. No. of App. 17 Import Entitlement percentage 3. (i) Natural silk ready-made garments, hosiery and knitwear containing 100% natural silk by weight. O.4(i) 50% (ii) Natural silk ready-made garments, hosiery and knitwear containing less than 100% but not less than 85% natural silk by weight O.4(ii) 40% (iii) Natural silk ready-made garments, hosiery and knitwear containing less than 85% but not less than 50% natural silk by weight. O.4(iii) 30% (iv) Natural silk ready-made garments, hosiery and knitwear containing less than 50% but not less than 20% natural silk by weight. O.4(iv) 20% 6. The Petitioner states that he had already obtained a con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re quantity of the raw mulberry raw silk that has been imported i.e., 1500 kgs should have been exported in the form of natural readymade garments utilising such imported goods. That, in fact, is the crux of the dispute in the present case. 10. The Respondents took the stand that the Petitioner had failed to satisfy the obligation in terms of Notification No. 117/88-Cus. dated 29th March, 1988 since the weight of the consignment of embroidery silk garment exported by the Petitioner was 557.147 kgs only. It was, therefore, concluded that the balance quantity (1424.82 kgs-557.147 kgs.= 867.673kgs) of imported raw mulberry silk was not utilized and, therefore, to that extent, the Petitioner would have to pay the corresponding customs duty. A show cause notice was issued to the Petitioner on 24th August, 1991. 11. The stand of the Petitioner was, however, that the only obligation under the scheme was to export natural silk garments of the value of ₹ 20 lakhs which it had fulfilled even prior to the making of the import. 12. By the order dated 24th January, 1992, the Assistant Collector of Customs rejected the Petitioner s explanation and concluded that the Petitioner wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able thereon which is specified in the First Schedule to the Customs Tariff Act, 1975 when such goods are imported for the purposes of manufacture of products (referred to as resultant products) or replenishment of goods used in the manufacture of the resultant products or both and for export out of India as mandatory spares along with the resultant products, for the execution of export orders in accordance with the Import Export Pass Book Scheme. Among the conditions stipulated to be fulfilled for availing of the exemption in terms of the said notification are that the imported goods should be specified in and covered by the import licence, incorporated in the Import Export Passbook in respect of their value, quantity if any, description and technical characteristics. Another specific condition is that the resultant products and manufactory spares, as specified in the said Import Export Pass book in respect of value, quantity (if any), description and technical characteristics are exported out of India within the period specified in the said Import Export Pass Book or within such extended period as the Export Commissioner in the Office of the Chief Controller of Imports and Expor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied in Appendix 13-D is achieved from the c.i.f. value of imports to f.o.b. value of exports. In cases where a Pass Book is issued on the basis of specific norms as per option outlined at (iii) above, subsequent requests for the issue of Pass Book(s) for the same product received from the same applicant can be considered by the licensing authorities on the basis of these norms without reference to the Advance Licensing Committee at the Headquarters. 21. It is plain, therefore, that Para 259 (3) would apply only where an exporter who find that the value norms specified in Appendix 14-A are not appropriate for his export product, opts to have a passbook issued in terms of the norms under Appendix 13-C or norms already fixed for the same export product by the Headquarters Advance Licence Committee or to get the norms fixed from the said Committee. This is perhaps due to the fluctuation in the international market which might make it impractical for the exporter to meet the value norms as endorsed on the licence. In the present case, the Petitioner having not opted for any change in the value norms as endorsed in the license, the question of the applicability of Para 259 (3) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2193/1991), the CEGAT accepted a similar plea of the exporter in that case that in terms of Notification No. 117/88-Cus, the export obligation was to be met only in terms of value and there was no quantity restriction. Therefore, neither the DEEC Circular No. 6 dated 19th June, 1990 nor the letter of the Member Customs dated 11th September, 1990 can be relied upon by the Department to restrict the exemption available to the Petitioner in terms of Notification No. 117/88-Cus., dated 29th March, 1988. 25. Ms Sonia Sharma, learned counsel for the Respondent, referred to the decision of the Karnataka High Court in Pooja Exporters v. Assistant Director, D.R.I. 1989 (41) ELT 21 Kar. A perusal of the said decision reveals that it was a case arising under the Advance Licence Scheme and not under the Import and Export Pass Book Scheme. The facts in that case concerned diversion of the imported goods to a place other than where it was supposed to be utilized in the manufacture of the resultant products for exports. In the present case, it is not the stand of the Respondent that the Petitioner has diverted the unutilized quantity of imported goods to some other destination or for any other ..... X X X X Extracts X X X X X X X X Extracts X X X X
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