2013 (11) TMI 1207

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....n their EOU. These notifications provides exemption to certain goods listed in Annexure-I to the notification which goods are intended for manufacture of articles for export and covered by clause (a) of opening paragraph of the notification. These Notifications also provide exemption from duties to capital goods and spares listed in Annexure-V to the notifications and the exemption is provided in clause (d) of the opening paragraph of the notifications. From 20-05-05, there was a restriction in Annexure-V that value of spares imported under Annexure-V should not exceed 5% of the value of the equipment imported under the said annexure. The Revenue on scrutiny of the accounts of the applicants found that they had imported more than 5% of the ....

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....he 100% EOU. He points out to the impugned order accepted the fact that they have not removed more than 5% of the value of the equipment specified in Annexure-V to the quarries and therefore they were within the limit specified under the notification. He further invites our attention to the clarification issued by the Ministry of Commerce vide letter F.No.01/92/180/42/AM07/PC-VI/95 dated 21.04.2008 where it has been specifically clarified that the restriction of 5% is only in respect of value of spares that can be taken to the quarry sites and spares can be procured beyond 5% limit. He further refers to DGFT Policy Circular No.10/2009-2014 dt. 12.10.2009 in which an extract from OM issued by Dept of Revenue is reproduced as below:  ....

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....xure-A can be imported without limit calculation showing more than 5% of the value of equipment in Annexure-V has been imported is not correctly worked out. Some of these equipment are common and therefore spares imported may be more than 5% and that cannot be a reason to demand duty. 3. Opposing the prayer, Ld. AR for Revenue submits that as per the notification, Annexure-I and Annexure-V contains lists of machineries which are for different purposes. Annexure-I is for equipment used for manufacturing purposes and Annexure-V is for equipment used for quarrying. The demand is only in respect of spares for equipment meant for quarrying which has been imported in excess of 5% of the value limit. It is his submission that restriction put in....