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TMI Blog2022 (5) TMI 1316X X X X Extracts X X X X X X X X Extracts X X X X ..... id 1,00,000/- U/S 117 of Customs Act, 1962 Appeal No E/36/2011 Order in Appeal No RT/50/LTU/Mum/2010 dated 13.10.2010 08/LTU/2009/ ADDL/MK dated 12.05.2009 38,71,681/- U/S 11(A)(1) of the Central Excise Act, 1944 along with Act, interest U/S 11AB ibid 38,78,681 /- U/S 11 AC of the Central Excise Act, 1944 1.2 Two appeal are filed under Customs Act, 1962 and third one under Central Excise Act, 1944. By the order dated 05.12.2019 in appeal No E/36/2011, bench ordered for clubbing of the three appeals stating as follows: "Both sides submit that Customs Appeals arising out of the same fact bearing No C/994-995/2010 have also been filed by the Revenue. They request that the said Customs appeals also be tagged with the present appeal and heard together. Registry is directed to tag all these 3 appeals and list them for disposal on 09.01.2020." 2.1 Respondent is a 100% EQU unit and operating under 'Letter of Permission' dated 01.01.2002, issued by the Development Commissioner, Special Economic Zone. They had started their commercial production from 18.01.2004. The letter of permission mentioned the finished goods for exports as "Capsules/Tablets of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra-2, for the requirement of import of capital goods for remaining period of three years 2006-07 to 2008-09. The Asstt. Development Commissioner, SEEPZ SEZ, at para-1, have noted that, the unit has commenced production w.e.f 18.4.04. This noting is in respect of the condition given at para 3 of the LOP dated 1.1.2002, whereby it is insisted that the unit should commence the "commercial production" within three years from date of permission (1.1.2002). It is not in connection/relation with the amendment portion which follows subsequently. Therefore it is opined that, said "commercial production" is relatable to the items of manufacture i.e. "capsules/tablets of pharmaceutical formulations" and not for the items amended thereafter. * The broad banding permission dated 15.5.06, was not a clarification on any matter. Hence the commissioner (A)'s findings contending that, it applies retrospectively, is not acceptable on merits, as the assessee has functioned beyond the scope of original LOP itself and without either informing and obtaining permission from the Development Commissioner or the jurisdictional AC/DC as provided under Section 65 of the Customs Act, 1962 read with Sr. No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... * Synergies Dooray Automotive Ltd. {2008 (226) ELT 529 (T-Bang)] * Sanghi Spinners (I) Ltd [2007 (209) ELT 43 9T-Bang)] * Prime Furnishing Pvt Ltd [2006 (199) ELT 257 (T-Mum)] * Dharampal Lal Chand Chug [2015 (323) ELT 753 (Bom)] 4.1 We have carefully considered the impugned order along with the grounds of appeal and the arguments made during the course of hearing. 4.2 While deciding the appeals Commissioner (Appeals) has by observed as follows: "5. The appellant is a 100% EOU manufacturing unit. It is not alleged that duty free raw materials procured under dispute are not used for manufacture of goods by 100% EQU unit that are subsequently exported. The only allegation was that the finished goods that are exported are not included in their 'Letter of Permission' issued by the Development Commissioner, Special Economic Zone. 6. I have gone through the Letter of Permission (LOP) dated 01.01.2002, wherein it is found that the said LOP is granted for manufacture of capsules/tablets of Pharmaceutical formulation. It is contended the appellant that Gel/Suspension/injection are different forms of pharmaceutical formulation and classification of the pharmaceutical f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 62. - There is no dispute that all the ingots, which are imported are used in the manufacture of Aluminium wheels and these wheels have been exported. In the manufacture of the wheels, while melting the Aluminium ingots, the Aluminium Dross comes as a by-product. In a case like this, where the finished product is aluminium wheels and which is excisable, the proviso cannot be invoked at all for any reason. A clear reading of the Notification reveals that the proviso will be applicable only when the finished goods are non-excisable. The question of excitability of Aluminium Dross etc. is not at all relevant where the finished products are excisable. No duty can be demanded on the imported Aluminium Ingots relatable to the Aluminium Dross generated as all ingots have been used in the manufacture of final products (Aluminium wheels) which have been exported. (paras 5, 5.1, 5.2)". 4.3 Undisputedly the Letter of Permission of 2002, was initially in respect of finished goods namely, "Tablets and Capsules of Pharmaceutical Formulations". Respondents have vide their letter dated 20.03.2006 had requested for addition of finished products in LOP of 2002. The relevant extracts of the said let ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibed in the Foreign Trade Policy, failing which you may be liable for penal action. iii. It is noted that you require imports of capital goods worth US$ 6,12.880/- for remaining period of three years 2006- 07 to 2008-2009. iv. It is noted that you have projected export turnover/export performance of US $ 73,02,000/ for the period from 2006- 07 to 2008-2009. v. The Letter of Permission No. PER/30/2001/SEEPZ/EOU-79/01-02, dtd. 1.1.2002, as amended, as amended, under reference stands amended to the above extent. vi. All other terms and conditions mentioned in the Letter of Permission No. PER/30(2001)/SEEPZ/EOU- 79/01-02, did. 1.1.2002, as amended, shall remain unchanged. vii. You are requested to confirm acceptance of the above terms and conditions. viii. You are requested to execute Legal Agreement in the enclosed format in respect of revision of projections within 15 days from the receipt of this letter, ix. Please keep this letter attached to the original Letter of Permission No. PER/30(2001)/SEEPZEOU-79/01-02, dd, 1.1.2002, as amended and acknowledge the receipt." 4.4 It was never the case of the revenue that the raw materials as imported were not used for the manuf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or value as specified in the said LOP. IN absence of any such allegation or finding by the relevant authorities the violations if any cannot be termed to be anything more than technical violations as pleaded by the respondents and held by Commissioner (Appeals). 4.7 We also take note of the decision of the tribunal in the case of G T Cargo Fitting India Pvt Ltd, referred to by the counsel for the respondents where following has been held in similar circumstances:- "4. It is seen that during the course of adjudication the appellant approached their Development Commissioner, who amended the earlier LOP by including the item namely "lashing belt system" and modified the earlier existing LOP dated 27-9- 2000 vide his communication dated 9-5-2011. The Lower Authorities have not accepted such modification on the ground that the same stands modified with effect from 9-5-2011 and as such cannot be held to be available and applicable during the period prior to the said date. 5. On going through the said letter dated 9-5-2011 we note that the same is not a fresh LOP issued by the Development Commissioner and the same is to the effect that the item lashing belts system stands included in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment of duty which is not used in the manufacture of garbage bags of plastics. The appellants are not disputing the fact that in fact the appellants manufactured plastic bags which are used as packing material. The contention of the appellants is that subsequently Letter Of Permission was amended and appellants were allowed to manufacture plastic bags also. The DGFT has also issued Show cause notice to the appellants. The demand is for the period prior to 25.8.2003. Prior to 25.8.2003, the appellants were allowed to manufacture garbage bags of plastics. Appellants had not manufactured garbage bags of plastics out of the raw material procured without payment of customs/excise duty under Notification N.53/97 Cus dated 3.6.97 and Notification No. 1/95 CE dated 4.1.95. As the appellants had not fulfilled the conditions of the above mentioned notifications, the demand in respect of raw materials which was procured without payment of duty of excise is upheld." 4.10 The other decisions referred to by the revenue are in respect of limitation and the jurisdiction. Since none of those issues are under consideration as we uphold the order of Commissioner (Appeals) on the merits ..... X X X X Extracts X X X X X X X X Extracts X X X X
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