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<h1>Court rules demand for standard duty on manufacturing wastages legally invalid. Customs Notification does not cover wastages.</h1> The court ruled in favor of the petitioner, finding that the demand for payment of standard duty on wastages in the manufacturing process was not legally ... Customs Duty - Concessional rate of duty Issues:1. Interpretation of Customs Notification No. 152/77 dated 15.7.1977 regarding imposition of duty on wastages in the manufacturing process.2. Validity of demand for payment of standard duty on wastages by the 1st respondent.Detailed Analysis:Issue 1: The case involved the interpretation of Customs Notification No. 152/77 dated 15.7.1977 concerning the imposition of duty on wastages in the manufacturing process. The petitioner, engaged in manufacturing stainless steel products, imported raw materials through the 1st respondent at a concessional rate of customs duty. The petitioner contended that the demand for payment of differential duty for wastages mentioned in the End-Use Certificate was illegal and violated natural justice. The Customs Notification exempted goods for specific purposes, and the petitioner argued that wastages should not attract standard duty as the entire raw material was utilized for manufacturing purposes.Issue 2: The 1st respondent issued a demand notice for payment of standard duty on the alleged wastages not accounted for by the petitioner. The respondent contended that as per the bond executed by the petitioner, any difference between the duty actually payable and that paid must be remitted if the goods were not used for the intended manufacturing purpose. The respondent claimed that the petitioner had not consumed all the quantity released and must pay the differential duty. However, the petitioner argued that the Customs Notification did not provide for imposing duty on wastages and that the demand for standard duty was not legally sustainable.The court examined the provisions of Customs Notification No. 152/77 dated 15.7.1977 and concluded that there was no specific provision for imposing standard duty on wastages occurring in the manufacturing process. The court held that if the entire raw material was utilized for manufacturing purposes and there was no provision in the notification regarding wastages, the demand for payment of standard duty on wastages was not legally valid. Therefore, the court allowed the writ petition in favor of the petitioner, stating that the demand for payment of standard duty was wrong and unsustainable in law.
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