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TMI Blog2018 (1) TMI 1379X X X X Extracts X X X X X X X X Extracts X X X X ..... n 35(G)(2) of the Central Excise Act, 1944 against the order dated 28.10.2016 by which learned Tribunal dismissed the appeal of the Department and upheld the order passed by the Commissioner, Central Excise, Indore. 2. Brief facts of the case are that the respondent - M/s STI India Ltd. is registered as 100% EOU for manufacture of cotton yarn, cotton knitted fabric and polyester cotton yarn. They have cleared their finished goods for export and sales in Domestic Tariff Area (DTA) along with cotton waste generated during the course of manufacture of finished goods. 3. The dispute in the present case relates to treatment of cotton waste cleared to DTA sales. The view of the Department is that sale value of cotton waste should be included in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been impugned in these appeals. 7. Learned counsel for the appellant has submitted that the respondent for the relevant year 2004-05 cleared the cotton waste without including the same in the DTA limit and thus paid concessional rate of duty for cotton goods also which were over and above the limit of 50%. If the value of cotton waste exported was included in the DTA limit then full rate of duty was payable in respect of cotton goods also. 8. Clause 6.8(e) of the Exim Policy 2004-2009 reads as under :- 6.8 The entire production of EOU/EHTP/STP/BTP units shall be exported subject to the following: (e) Scrap/ waste/ remnants arising out of production process or in connection therewith may be sold in the DTA as per the Standard Input ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otton waste has nothing to do with the DTA restriction as the restriction for EOUs on domestic sales is clearly in relation to the "Value of goods" and not the tax. The concessional rates for domestic sales have been restricted so that EOUs concentrate on exports in view of various benefits given to them. The policy is for promotion of exports and not domestic trade. 11. As per the Exim Policy 2002-2007, the value of scrap/waste is to be included in the sale of 50% under para-9.20 and prays that the impugned order be set aside. 12. Per contra, Shri Alok Barthwal, learned counsel for the respondent has submitted that this issue was considered by the Gujarat High Court in the case of Commissioner of Central Excise and Customs, Surat-II vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned judgement of the Tribunal is set aside and the matter is remitted to the Commissioner for calculation of duties payable in terms of notification No.2/95-CE, as interpreted hereinabove. 15. On due consideration of the aforesaid so also the fact that the Assistant Development Commissioner is the final authority, learned Tribunal has rightly held that obtaining soft cotton waste in the course of carding and combing, ginning cotton does not amount to manufacture and no new product with distinct name, usage and character emerges. The cotton waste is exempted under Notification No.23/2003-CE without any condition. The Assistant Development Commissioner unconditionally exempted from duty. 16. On careful examination of the aforesaid, we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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