9911796707
TMI Blog2016 (6) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... ondition that similar goods i.e. goods namely Cotton Yarn and Synthetic Yarn should have been manufactured and exported from the unit in the past. It is not disputed and indeed it is demonstrated by the various AR-4 application copies submitted by the appellant that the unit had exported both Cotton Yarn and Synthetic Yarn in the past. Seen in this context it become evident that condition No. 1 in the DGFT's Permission letter does not disallow domestic clearances of synthetic yarn granted by the Development Commissioner in the opening paragraph of the said permission letter. Indeed, this interpretation is in conformity with para 6.8 (c) & (d) of the Hand Book Procedure 2002/2007. As is evident that, the entitlement for domestic clearance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2006 on the ground that the reduction in penalty on the appellant assessee from ₹ 8,07,227/- to ₹ 1,00,000/- was not legal and proper, and therefore, should be restored to ₹ 8,07,227/- imposed by the primary adjudicating authority. The demand has been confirmed on the ground that the appellant had cleared Polyster Synthetic Yarn in the DTA on payment of duty in terms of Notification No. 8/97-CE dated 01.03.1997 as amended on the basis of DTA clearance permission granted by the Development Commissioner on 15.04.2002 which was subject to the condition that the DTA sale will be of similar goods or goods belonging to same class as that of goods manufactured and exported from the unit and during the quarter January to March 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... * The appellant assessee being 100% EOU, the goods were allowed to be cleared by the Central Excise authorities on the basis of the DGFT permission. 3. The Ld. DR, on the other hand, stated that (i) Cotton Yarn and Synthetic Yarn are neither similar goods nor they belong to the same class of goods because one is obtained from natural fiber while the other is obtained from the artificial fiber. (ii) When no synthetic yarn was exported during the period January to March 2002 in respect of which period the permission was sought for DTA clearance, the question of the appellant being eligible to clear synthetic yarn in domestic tariff area does not arise. (iii) There was no bunching of products permitted in the policy pertaining to 2002-200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s granted by the DGFT on the appellants application dated 9.4.2002. We have perused the said application which was submitted during the hearing and find that in the said application the appellant had categorically mentioned that during the quarter January to March 2002 they had only exported Cotton Yarn and it had sought permission for DTA clearances for both Cotton and Synthetic Yarn up to the value of ₹ 3 Crores. 6. Para 6.8(b) of the Import and Export Policy which is referred to in the permission of the Development Commissioner is reproduced below: Units, other than gems and jewellary units, may sell goods/ services upto 50% of FOB value of exports, subject to fulfillment of minimum NEFP as prescribed in Appendix-II of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufactured and exported from the unit. This condition does not say that the goods should have been necessarily manufactured and exported during the quarter January to March 2002. If manufacture and export of Synthetic Yarn in January-March 2002 was required for DTA sale of Synthetic Yarn then the Development Commissioner would not have extended the approval for domestic sale of both Cotton Yarn and Synthetic Yarn as he was very much aware that there were no exports of Synthetic Yarn during that quarter. Therefore, the only harmonious interpretation of the scope of the said condition is that the clearances in the DTA for Cotton Yarn and Synthetic Yarn is subject to the condition that similar goods i.e. goods namely Cotton Yarn and Synthetic Y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Yarn do not belong to the same class of goods nor are they similar goods is not germane to the present case because the appellant asessee had manufactured and exported both Cotton yarn and Synthetic Yarn from the same unit and therefore clearance of Synthetic Yarn for DTA sales as per the DGFTs Permission letter dated 15.04.2002 was in conformity with its condition No. 1 also. Consequently, the impugned duty demand becomes unsustainable. As a result, the question of any penalties is rendered preposterous which in turn renders the Revenue s appeal also infructuous. Accordingly, the impugned orders are set aside. The appeals No. 2640 2641/2006 of the appellant-assessee and Mr. B. K. Sharma are allowed and the Revenue s appeal 2693/2006 is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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