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TMI Blog2019 (3) TMI 1450X X X X Extracts X X X X X X X X Extracts X X X X ..... ted material was used/ consumed in manufacture of export goods and the export obligations against the Advance authorisations stands fulfilled. The SION Norms has been promulgated in order to ward off the disputes pertaining to consumption of inputs. Once the norms are fixed, it is imperative for the assessee to follow such norms. If the assessee is not able to produce the goods as per the said norms and fails to fulfil the export obligation, he is liable to pay the customs duty covered by the advance authorisations. Once the SION Norms are fixed and the manufacturer has manufactured goods under the said norms and the export obligation stands fulfilled the revenue cannot demand duty on the ground that the actual consumption was less than ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ell as by the revenue against Order-in-Original No. KDL/COMMR/PVRR/03/2016-17 dated 17.05.2016 passed by Commissioner of Customs, Kandla. The brief facts of the case are that the above named assessee concerns had imported duty free material against advance licence for manufacture of goods for export or deemed export. They were also clearing their goods in domestic market. They were issued show cause notice dt. 19.06.2015 that after fulfilling of export obligation under various Advance Authorisations they were left with certain quantity of duty free imported material/ inputs which they utilized in the manufacture of finished goods cleared to DTA. The show cause notice relied upon statements of employees/ directors of the Assessee concerns. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee appellants submits that the demand is absolutely erroneous. He submits that the ratio of inputs is given in SION. The revenue has demanded duty on the ground of actual consumption of raw material in export product ignoring the raw material contained in wastage and off grade production which are inevitable while producing export quality products. He submits that the revenue s contention of demand is that the duty free entitlement of appellant assessee is lower of SION Norms or actual consumption in export products. The material contained in off grade production and wastage should also be treated as consumption which has not been done. They have fulfilled the export obligation in terms of Notification No. 96/2009 Cus as specified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity of goods which does not meet the export specification are also manufactured and are sold as off grade which is nothing but wastage. He submits that in their excise returns they do not differentiate between export product and other grades and all are clubbed and shown as manufactured products. The actual yield of their export product is around SION Norms. 3. Shri Sameer Chitkara, Ld. Additional Commissioner (AR) appearing for the revenue reiterates the findings of the adjudicating authority and submits that since the actual use of material in export products was less hence the remaining material used in goods cleared into DTA is liable for customs duty. 4. We have gone through the facts of the case. The revenue is demanding customs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tured goods under the said norms and the export obligation stands fulfilled the revenue cannot demand duty on the ground that the actual consumption was less than SION. If such practice is adopted, it will lead to SION becoming redundant and it will open Pandora box of disputes. The SION Norms has been fixed after taking into consideration all the relevant factors and the overlooking of the same is not permissible. The whole purpose of fixing the SION norms is to avoid physical check of actual consumption of inputs in the manufacture of final products. For that very reason there is no mechanism provided for check or audit of actual consumption of imported goods if the same is covered under the SION norms. If the contention of the revenue is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty free inputs once export obligation is completed. In case where cenvat credit facility on inputs have been availed for the exported goods, even after completion of export obligation, the goods imported against advance authorization shall be utilized in the manufacture of dutiable goods whether within the same factory or outside (by a supporting manufacturer), for which the authorization holder shall produce a certificate from either the jurisdictional central excise Superintendent or CA, at the opinion of exported, at the time of filing application for EODC to RA concern (b) Further the manufacturing waste/ scrap, as allowed, can be disposed of with the payment of applicable duty even before fulfilment of export obligation. R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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