EOU duty liability upheld for unaccounted granite slabs shortage

The Tribunal upheld the duty liability of a 100% Export Oriented Unit (EOU) for an unaccounted shortage of polished granite slabs, rejecting the appellant's arguments regarding the manufacturing process and stock taking process. The Tribunal dismissed the appeal, emphasizing the appellant's duty liability and the significant unexplained shortage of slabs.

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Issues involved:
1. Duty liability of a 100% Export Oriented Unit (EOU) for unaccounted shortage of polished granite slabs.
2. Exceeding remand directions by lower authorities.
3. Question of 'manufacture' in terms of a Supreme Court decision.
4. Correctness of stock taking process.

Analysis:
1. The case involved a 100% EOU facing duty liability due to an unaccounted shortage of polished granite slabs found during a stock verification. The Original Authority confirmed the duty demand, which was upheld by the Commissioner (Appeals), leading to the appellant's appeal against this decision.

2. The appellant argued that the lower authorities exceeded the remand directions by passing orders on different grounds and confirming the duty liability. The Tribunal had directed a re-examination of the issue of 'manufacture' based on a Supreme Court decision, which the lower authorities considered applicable to the case. The shortage of slabs was attributed to unaccounted disposal by the appellant.

3. The appellant contended that their manufacturing process did not amount to 'manufacture' as per the Supreme Court decision cited. However, the Tribunal noted that being a 100% EOU, the appellant was required to account for all goods in bonded premises for export, and the shortage of slabs indicated unaccounted clearance. The Tribunal referred to a High Court decision dealing with a similar situation to support this finding.

4. The correctness of the stock taking process was also challenged by the appellant, alleging improper measurement by the officers. However, the Tribunal observed that the stock taking was conducted in the presence of independent witnesses and the appellant's representative, who expressed satisfaction with the process. The significant shortage of over 600 sq. mtrs. of slabs further supported the findings.

In conclusion, the Tribunal found no merit in the appellant's appeal and dismissed it, emphasizing the appellant's duty liability as a 100% EOU and the unexplained shortage of polished granite slabs.

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