2007 (8) TMI 563

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....nt amount of penalty on M/s. Lavino Kapur Cotton Pvt. Ltd. under Section 11AC and penalty Rs. 1 lakh under Rule 25 of CER, 2002 and penalty of Rs. 10 lakhs imposed on Shri Vikram Kapur, Director of the applicants. 2. The applicant is a 100% EOU engaged in the manufacture and export of absorbent cotton falling under chapter heading 30.04 of CETA, 1985. The raw cotton and cotton comber noil were imported by them as well as locally procured and used as the main raw material along with other materials viz. caustics soda, stabilizers, etc., in the manufacture of absorbent cotton. In the process of cleaning the final product, the cotton waste known as cotton droppings/wastes arises. They were issued a show cause notice dated 21-3-2005 see....

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....f any condition. Under the Exim Policy for the period 2002-2007, they are allowed to clear cotton wastes and remnants arising out production process on payment of concessional rate of duty as applicable upto 50% of FOB value of exports. Department has wrongly assumed that for sale in excess of 5% permission from the Development Commissioner was necessary. Under the Exim Policy 2002-2007, there is no requirement of obtaining permission from the Development Commissioner. Majority of demands fall under this period that is from April, 2002 to March, 2006 and only part of demand for the period June, 2001 to March, 2002 is under the previous policy. In respect of part period June, 2001 to March, 2002, it was submitted that same is also covered un....

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....2002-2007 allows clearances of wastes, scrap and remnants within overall ceiling of 50% of FOB value of exports in respect of waste, scrap arising out of production process sold in DTA as per Standard Input-Out norms under the duty exemption scheme. It is the Revenue's contention that Standard Input-Out norms have no where been fixed and therefore clearances have to be considered as not in accordance with provisions of Exim Policy. However while working out the demands even for the period 2002-2007, 5% waste has been considered within the norms, even though Commissioner states that no Standard Input Out norms have been fixed whatsoever. We also note that demand on similar grounds has been dropped by the Commissioner for the period April, 20....