2008 (8) TMI 679

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....tion No. 53/97 dt. 3-6-97 for use in the manufacture of cotton yarn for export. The present dispute relates to such imports made between Dec. '99 to March '02. During this period, cotton waste was generated in the course of manufacture of cotton yarn out of the imported cotton. This exceeded 25%, which was the maximum permissible wastage for EOUs (like the respondents) using imported cotton in the manufacture of combed cotton yarn below 40's counts. According to the department, the EOU was liable to pay duty of customs on a quantity of the imported cotton which was equivalent to the quantity of excess cotton waste generated during the aforesaid period. This view based on condition No. (7) attached to Customs Notification 53/97 ibid. Accordi....

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....excess cotton waste, in discharge of contractual obligation arising from the terms of the bond executed by them. It is submitted that, as the excess cotton waste was not accounted satisfactorily, the provisions of Section 72(1) were applicable and duty could be demanded on equivalent quantity of imported cotton, without time limit. The ld. SDR has reiterated these grounds of the appeal. 3. It is submitted by the ld. Counsel for the respondents that the factual allegations in the SCN were all made with reference to Section 28 of the Customs Act and that there was no allegation with reference to Section 72 of the Act. The counsel has particularly referred to an averment contained in para-4 of the memo of appeal. This averment reads th....