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TMI Blog2005 (4) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... , has been used in the goods exported, the provisions of the DEEC Scheme have been met. Confiscation therefore cannot be upheld. Thus, we do not propose to apply the strict Interpretation of notification ruling relied by the ld. DR. When duty demands, confiscation are not being upheld, and there is no cause or case for a penalty on any appellant herein. Hence, the order is set aside appeals allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... rtment also alleged that in the light of evidence adduced during investigation it appears that M/s. TPIL imported Nucrel-3990 under the generic name Ethylene Acrylic Acid Polymer. It also appeared that they were aware of the fact that Nucrel 3990 was not required to be used in their factory for production of resultant export product i.e. Aseptic Packaging Material. It further appeared that they had deliberately misrepresented the facts and records to the Chartered Engineers with an intention to import Nucrel 3990 without payment of Customs Duty for sale in the local market instead of utilising the same for manufacture and export of Aseptic Packaging Material, as required under DEEC Scheme. It appeared that TPIL failed to maintain records of receipt and consumption of duty free imported Nucrel-3990 as required under relevant appendices of Handbook of Procedures to the EXIM Policy, in force. Further, it appeared that while selling Nucrel 3990 under excise invoice indicating the same "as if manufactured", with an intention to mis-lead jurisdictional Central Excise authorities, as well as their buyer viz M/s. Ecoplast Valsad, Gujarat that they were selling the inputs on which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, Finance of Ecoplast Ltd. affirming that whatever quantity of Nucrel received from Tetra Pak has been converted into K-film and K-film has been sent back to Tetra Pak. He has also affirmed that K-film has no use for manufacture of his other products. (b) Few invoices issued by Tetra Pak for supply of Nucrel to Ecoplast Ltd. (c) Few illustrative invoices issued by Ecoplast for supply of K-film to Tetra Pak. (d) Worksheet establishing that Nucrel was made available to Ecoplast on cost basis. (e) Issue slips for primacore and K-film to establish that these items have been used within the factory of the production for the manufacture of asceptic packaging material. (f) Modvat declaration dated 18-1-97 declared K-film and prima facie core as inputs for the manufacture of asceptic packaging materials. (g) Modvat declaration dated 11-7-97 declaring K-film and prima facie core as inputs for the manufacture of asceptic packaging material. (h) Clarification dated 19-2-2004 by Shri Abhay D. Joshi of M/s. A.D. Joshi & Associates. (i) Correspondences exchanged with DGFT by Tetra Pak with regard to fixation of input output norms, the export of aseptic packaging material manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the fact that the notification and the import policy go hand, and both of them subserve the same purpose. It does not follow from this that meaning to be attributed to the particular term in the notification must be identical with the meaning attributed to that term in the import. It would however be perfectly legitimate, and indeed required to construe the term occurring in the notification in the context of the Policy." The Third Member, agreed with the above view in paragraph 27 as under : "27. ... ..the notification and a policy serves the same purpose. The term in the notification has to be construed in the context of the Policy.....The purpose for which the notification is issued with condition has to be complied to get the benefit of concessional rate of duty has to be borne in mind in interpreting it....." In view of the above, the submissions that the notification Nos. 30/97-Cus. and other notifications in question have to be interpreted in harmony, to achieve the object of the Government in promoting the exports out of India. The ld. Advocate has force and when read with paras 120 & 121 of the Handbook of Procedures of 1992-97 (April 1993 Edition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A combined reading of objects and reasons of the amendments made in April 1994 as set out in the preface to the Handbook and amended paras 120 & 121 of the Handbook establishes that giving of the material to the supporting manufacturer for further manufacture is not violation of the actual user condition imposed by the advance licence. Amendments made in April 1995 edition of the Handbook - No need to mention the other manufacturer in the advance lience, if the licence holder takes upon himself the entire obligation - If he, the licence holder wants the other manufacturer also to be responsible, the other manufacturer's name will be added to advance licence and both have to furnish bond/undertaking jointly and severally. New Para 120 as introduced in the Handbook of Procedures in April 1995 edition reads as under: - "Actual user Condition and facility of co-manufactures 120. The licence granted under this scheme shall be subject to the Actual User condition till redemption of LUT. The licence holder is free to have the material processed through any other manufacturer including a jobber. However, the licence holder under the scheme shall be solely responsible for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as K-film and brought to appellants premises and consumed cannot be upheld. (h) The words "sold or transferred" as used in the notifications will not cover a situation where duty free imported material is Out Sourced for conversion amounting to manufacture or otherwise emergence of intermediate products which are returned to a Licence holder for further use/export. The entire DEEC is a schedule to the Customs notifications and an integral part thereof. Part B of the same relates to an ancillary of export product manufactured and if the words "Sold/transferred" are literally construed, even compliance to Part B would be then a violation of condition (VII) of the notification & of Paras 4.16 & 4.17 of the Policy. Such an interpretation cannot therefore be accepted, since a harmonized reading would be required in these matters as stipulated in Aphali Pharmaceuticals case [1989 (44) E.L.T. 613 (S.C.)]. Therefore, giving of the material to ECOPLAST and its receipt back cannot be a violation. (i) The decision in Sehgal Knitwears case [2002 (143) E.L.T. 653 (Tri. - Del.)], relied by the Commissioner, has been suitably distinguished by the ld. Advocate on facts of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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