TaxTMI 
TaxTMI 
2017 (11) TMI 1039
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....sioner, Ministry of Commerce. As per the permission granted by the Development Commissioner on 02.05.2005, the appellants are engaged in the manufacture of Neemazal formulation, Neem oil and Neem cake in their EOU Unit. The appellants procured Neem seeds and using the job worker to remove the husk of such seeds and thereafter by liquid extraction obtained Azadirachtin . They obtained the said product which is further used in obtaining Neemazal technical/formulation by evaporation and concentration. Extracted Neem kernel arising as a resultant product is sent to a job worker as per the contractual agreement for further processing. The job worker undertakes further activity by mixing the kernel extract with neem husk in specified ratio, using....
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....worker on which no duty liability can be fastened. ii) The present proceedings holding the appellants as liable to duty in terms of obligation on EOU for neem oil and neem cake is without justification as they are not involving in manufacture of the said products. iii) The duty demand has been made by wrong application of Foreign Trade Policy. Neem oil and neem cake are mentioned as byproducts in the SCN and also by lower authorities in their adjudication. By products are covered by different conditionalities for clearance to DTA. There is no need to have export of similar or identical goods as the same is required only for their main product which is Neemazal. On this count quantification of duty is not correct. ....
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....ii) The appellants are bound by the conditions of LOP and Foreign Trade Policy. Neem oil and neem cake cannot be considered as a waste or scrap. These valuable products are sold in the domestic market without payment of duty. Any clearance by EOU are covered by the conditions of Foreign Trade Policy and any clearance to DTA is bound by the rates as prescribed under the Notification No. 23/2003-CE dated 31.03.2003. The present products are not having any concession under the said notification. iv) The appellants are fully aware of the products and process and managed their activities in such a manner which resulted in improper clearance of two of the products emerging in the overall manufacturing process. No intimation has been give....
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....e or scrap. These are recognized as products for manufacture by the EOU in the LOP. 7.2 As per the conditions of the Foreign Trade Policy if the EOU is engaging the job worker, the resultant products are to be brought to the EOU for further disposal. In the present case, the same has not been done. Apparently, the appellants have used the facility of job worker to extract two of the products for which permission is granted to them as EOU. However, for these two products, the due process and conditionalities of EOU have not been adhered to. This is a clear violation of LOP conditions and Foreign Trade Policy. 7.3 Regarding the duty liability of the appellants, we have examined the impugned order and submissions of both the parties. Cle....