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of <h1>Tribunal Confirms Development Commissioner's DTA Sales Permission; Customs Department's Demands Overruled.</h1> <h3>COMMISSIONER OF C. EX., HYDERABAD Versus SANGHI SPINNERS (I) LTD.</h3> COMMISSIONER OF C. EX., HYDERABAD Versus SANGHI SPINNERS (I) LTD. - 2007 (209) E.L.T. 43 (Tri. - Bang.) Issues Involved:1. Interpretation of Paragraph 9.24 of the Handbook of Procedures 1997-2002.2. Validity of Development Commissioner's permission for DTA sales.3. Applicability of CBEC Circulars regarding duty demands.4. Role of Development Commissioner's opinion in adjudicating duty demands.5. Revenue's challenge to the Development Commissioner's interpretation of EXIM Policy.Detailed Analysis:1. Interpretation of Paragraph 9.24 of the Handbook of Procedures 1997-2002:The core issue revolves around the interpretation of Paragraph 9.24, which allows the bunching of products for Domestic Tariff Area (DTA) sales provided the total sale does not exceed the overall ceiling. The Commissioner noted that the products manufactured and sold into the DTA by the assessee (Cotton Yarn, Poly Cotton Yarn, Poly Viscose Yarn, and Polyester Yarn) fell under different Harmonized System (HS) Codes. The department contended that these products should not be bunched together for DTA sales as they fall under different HS Codes, thus exceeding the allowed percentage for individual items.2. Validity of Development Commissioner's Permission for DTA Sales:The Development Commissioner clarified that the products could be treated as a single item (Spun Yarn Cotton, Synthetic, and Blends) for DTA sales, irrespective of their different HS Codes. The Commissioner accepted this interpretation, noting that the Development Commissioner's office had reviewed and approved the DTA sales permissions for the relevant periods. This interpretation was crucial in determining that the assessee's clearances were within the permissible limits.3. Applicability of CBEC Circulars Regarding Duty Demands:The Commissioner referenced CBEC Circular No. 21/95-Cus. and Circular No. 122/95-Cus., which state that duty demands should be confirmed only after the Development Commissioner concludes that the unit has failed to meet its export obligations. The Commissioner emphasized that the Development Commissioner's opinion must be sought before confirming any demands based on the EXIM Policy. The Tribunal's previous judgments supported this stance, reiterating that the Development Commissioner's recommendations are binding.4. Role of Development Commissioner's Opinion in Adjudicating Duty Demands:The Commissioner cited several case laws, including Kitply Industries Ltd. v. Commr. of Cus., Kuntal Granites v. Commr. of Central Excise, and others, which established that the adjudicating authority is bound by the Development Commissioner's clarifications. The Commissioner concluded that the demands raised by the department were unsustainable without the Development Commissioner's recommendation.5. Revenue's Challenge to the Development Commissioner's Interpretation of EXIM Policy:The Revenue contended that the Development Commissioner was not justified in granting permission under the EXIM Policy, raising several grounds to support their demand for duty. However, the Tribunal found that the Development Commissioner's permission was valid and that the Customs Department could not take a contrary view. The Tribunal upheld the Commissioner's decision, noting that the clearances were made in accordance with the permissions granted by the Development Commissioner.Conclusion:The Tribunal concluded that the Commissioner had correctly accepted the Development Commissioner's permission for DTA sales and that the Customs Department could not challenge this interpretation. The demands raised by the department were found to be unsustainable, and the appeal was rejected. The Tribunal emphasized the binding nature of the Development Commissioner's clarifications and the necessity of adhering to the established procedures and interpretations under the EXIM Policy.
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