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TMI Blog2008 (9) TMI 221X X X X Extracts X X X X X X X X Extracts X X X X ..... er (T) Shri Sanjay Grover, Advocate, for the Appellant. Mrs. Archana P. Tiwari, Jt. CDR, for the Respondent. [Order per : M. Veeraiyan, Member (T)]. - This is an appeal against the order-in-original No. Commissioner/RPR/42/ 2005 dated 28/31-10-2005. 2. Heard both sides. 3. The relevant facts, in brief, are as follows :- (a) The appellant was issued a industrial licence dated 19-4-90 as a 100% EOU to manufacture and export latex hand gloves with annual capacity of 30 million pieces and annual export target value of Rs. 168 lacs. (b) They imported capital goods valued at Rs. 52,80,833/- duty free and imported inputs and also procured inputs from domestic tariff area duty free totally valued at Rs. 2.03 crore which inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y settled in their favour by the DGFT authorities. Initially an order was issued in 1996 holding that the value addition was minus 19.04% and a penalty of Rs. 25 lacs was imposed. Against the decision they preferred appeal to the appellate Committee of the Commerce Ministry who remanded the matter to the DGFT authorities for de novo consideration. In pursuance of the said remand direction the appellant filed detailed worksheet/data certified by the Chartered Accountant claiming the value addition as 49.22% (as against the required value addition of 44.95%); the Development Commissioner got these details verified through the jurisdictional Superintendent and ultimately the show cause notice dated 23-8-99 issued to them was withdrawn on 31-12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imported duty free envisages fulfillment of condition including the value addition norms. The Customs authorities are empowered independently examine whether the condition has been satisfied or not, notwithstanding any contrary decision of the DGFT authorities. In this regard she relies on the following decision - (i) Exports Apparel Group Ltd. v. Union of India - 1997 (91) E.L.T. 307 (Del.) (ii) Sheshank Sea Foods Pvt. Ltd. v. Union of India - 1996 (88) E.L.T. 626 (S.C.) (iii) Jacsons Thevara v. CC CE, 1992 (61) E.L.T. 343 (S.C.). 5.2 She reiterates the finding of the Commissioner relating to adoption of five years period for determining of value addition norms starting from 1989-90 onwards on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finding in 1996 that value addition was minus 19.04% as against the value addition claimed by the appellant at 49.22%. Such variation was reconciled in the subsequent proceedings. The wide variation was explained as due taking 'five years period' for determining value addition norms from 89-90 (based on commencement of production in March 90) instead of 90-91 (based on expiry of gestation period on 18-4-91) erroneously and taking only the exports made only up to 1994 till the time of seeking de-boning ignoring the subsequent exports. 6.4 The very same issue of not meeting value addition norms has been raised by the Customs authorities. The exemption notifications governing the 100% EOU are subject to conditions including conditions impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods as are not proved to the satisfaction of the Assistant Commissioner of Customs to have been used in the manufacture of articles for export". 6.6 In the present case, there were no raw materials or finished goods pending as stock at the time of de-bonding and that there was no diversion of such materials also. We do not agree that any duty liability can be fastened on the basis of notional requirement of inputs/raw materials meant for unfulfilled export obligation even when there was no actual import/procurement duty free of such inputs/raw materials. If duty demand is upheld in such a situation, then it would amount to levying duty on goods not imported and not procured which is not legally sustainable. The duty demand in this reg ..... X X X X Extracts X X X X X X X X Extracts X X X X
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