TaxTMI 
TaxTMI 
2024 (10) TMI 335
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.... 2. Department-Appellant on its part through its special Counsel submitted as follows for their appeals: - 1.1 A search was conducted at the premises of DAE, Rajkot on 05.09.2014. The investigation revealed that DAE had imported 19944.560 MT raw sesame seeds duty free under 21 AAs, out of which export obligation was fulfilled in case of 11 AAs, by exporting 8331.752 MT hulled sesame seeds (8413.07 raw sesame seeds considering 1% process loss). 1.2 As regards remaining quantity of 11531.490 MTs of raw sesame seeds imported under 10 Advance Authorizations during the period 06.03.2013 to 05.02.2014, they have exported 1369.940 MT hulled sesame seeds (1383.290 raw sesame seeds). However, as per Standard Input Output Norms (SION) and conditions of Advance Authorization, the importer was required to export 11417.306 MTs of hulled sesame seeds. At the time of search, only 620.608 MT sesame seeds were found in stock. Thus, 9527.592 MT raw sesame seeds, imported duty free, under AA were found not utilized by them for the specific purpose i.e. processing the imported sesame seeds into hulled sesame seeds and subsequent export under advance license, but, the said quantity w....
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....ral sesame seeds and no attempt was made to verify to whom the goods were sold. 2.2.5 They had filed Shipping Bills (S.B.) under advance authorization in EDI, but, due to technical reason CHA had filed fresh SBs under DBK. 2.2.6 Once Export Obligation Discharge Certificate (EODC) is issued by DGFT, Customs cannot demand duty against advance licenses. 2.2.7 They have relied on the ruling of Policy Interpretation Committee of DGFT dated 12.01.2018, wherein it is held that advance authorization holder has option to export resultant product using duty paid materials procured from domestic sources subject to actual user condition etc. 2.2.8 The interpretation of DGFT shall be final and binding for all; Relied upon case law of AKM Trading Corporation Ltd. 2.2.9 The process loss in SION is revised to 33% on 03.01.2018, vide Public Notice No. 49/2015-20. 3. The adjudicating authority dropped the proceedings against M/s Dhaval Agri Exports as well as Sh. Chandarana, mainly on the following grounds: (i) The Adjudicating authority in his findings has observed that the investigating agency has ignored the part of the statement date....
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....led these two appeals in respect of DAE as well as Sh. Chandarana. Department's Submissions 3. Department, inter alia, made following submissions through its Special Counsel 5. Legal provisions of exemption notification and advance authorization scheme: 5.1 The AAs utilized by DAE were issued with actual user condition and the goods imported were required to be disposed of as provided in Notification No. 96/2009-Cus dated 11.09.2009 and Para 4.1.5 of the FTP 2009-14. 5.2 The relevant condition (x) of the said notification reads as under: "That the said authorisation shall not be transferred and the said materials shall not be transferred or sold; Provided that the said materials may be transferred to a job worker for processing subject to complying with the conditions specified in the relevant Central Excise notifications permitting transfer of materials for job work." 5.3 Para 4.1.5 of the FTP 2009-14 reads as under: "Advance Authorization and / or materials imported there under will be with actual user condition. It will not be transferable even after completion of export obligation. However, A....
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....m(s) is / are endorsed on the authorization by RA in terms of Para 4.1.14 of FTP." Thus, the respondent has availed drawback, which is violative of the condition of the Advance Authorization. Further, the applications for conversion of shipping bills from drawback to advance authorizations have been rejected by the competent authority and nothing is forthcoming from the OIO that the respondent has paid the drawback amount claimed, along with interest. Hence, the findings of the adjudicating authority on this aspect are erroneous. 6.2 Shri Dinesh Tanna of Tirupati Agro, a broker firm, in his statement dated 09.09.2014, has categorically stated that the importers who import sesame seeds through him were also selling the same in the local market through him. In his further statement dated 21.01.2015, Shri Tanna stated that the goods viz. sesame seeds were delivered from Mundra and terms for supply to buyers is the responsibility of M/s. Dhaval Agri Exports. The place of delivery of the goods was Mundra i.e. port of import. The place of delivery (i.e. Mundra) mentioned in the contract notes itself is sufficient evidence to show that the goods were imported and diverte....
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....e process loss on earlier imports, it is found that the actual process loss is 1% only, which is also in conformity with SION. The importer himself has consistently shown a process loss of 1% in respect of all their exports in the past. Suddenly they claim that the process loss has increased to 13% which exactly coincides with the shortage noticed even after taking into account the exports made under Drawback scheme. In any case, even if the permissible limit of process loss has been increased to 33 %, it does not mean that they can avail more process loss than what is actual, which was 1% until then, and divert the rest. 6.5 Furthermore, the said Public Notice dated 03.01.2018 is prospective and not retrospective. The SION norms applicable to an Advance Authorization in force at the time of issuance of advance authorization will be applicable. Any subsequent amendment in SION norms cannot be made applicable retrospectively, unless otherwise specified in the Public Notice of DGFT. Each advance authorization contains quantity of goods to be imported and quantity of the goods to be exported, after considering the SION as applicable. 6.6 Further, in his stateme....
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....ed that the respondent is regular importer / exporter. Filing of total 361 shipping bills under drawback cannot, by any stretch of imagination, be regarded as a mistake, as claimed by the importer as these must be spread over a period of time. In their defence reply, they had stated that this was due to technical mistake by their CHA which looks farfetched. Maintenance of Records 9. As brought in the investigation, they were not maintaining separate accounts for usage of the indigenous and imported sesame seeds at different stages of processing. They were maintaining separate stock record of imported and indigenous sesame seeds and debiting the exports or other disposal against these. When they were asked as to how they ascertain whether the exported goods were from the imported or indigenous purchase, they could not give any satisfactory reply. They were also not maintaining any record to show the wastage arising during the processing of raw sesame seeds. It means they could be freely mixing the indigenous and imported sesame seeds at the stage of processing. DGFT ruling dated 12.01.2018 of Policy Interpretation Committee: 10. ....
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.... Vs UOI reported at 1996 (88) ELT 626, holding that Customs is not precluded by the licensing authority from conducting investigation in breach of condition of exemption notification, is applicable to the present case. It is pertinent to mention here that as on the date of search as per the books of accounts, stock of only 620.608 MT imported raw sesame seeds was available. As per Para 4.1.5 of the FTP 2009-14 the Advance Authorization and the materials imported there under will be with actual user condition and it will not be transferrable even after completion of export obligation. The adjudicating authority has failed to consider that for subsequent exports under advance licenses, it was not possible to fulfill the actual user condition as only small quantity of imported raw sesame seeds was available. The EODC issued by DGFT is without considering the facts and evidences unearthed in the course of the investigation and detailed in the show cause notice. The issuance of EODC by the DGFT does not bar the department from proceeding against the importer for violation of the conditions of the Notification granting exemption from payment of Customs duty. Grant of EODC is toward....
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....ee raw material diverted and sold in the domestic market needs to be confirmed. 14 From the facts narrated hereinabove it can be concluded that (i) the imported sesame seeds, which were imported duty free under advance authorization were sold/diverted into local market, (ii) subsequently, the export obligation was fulfilled by utilizing different goods (iii) the claim of 13% process loss is not sustainable as earlier they have consistently shown a process loss of 1%. Thus, the respondent herein has violated the conditions of the Notification as well as FTP 2009-10. Hence, Customs duty is recoverable and goods liable for confiscation. Dhaval Agri Exports and Shri Jay Sureshbhai Chadarana, CEO are also liable to penalty under section 114A and 112(a)/112(b). 15. In view of the above, it was prayed to allow both the departmental appeals. 4. Submissions of M/s. Dhaval Agri Exports (Hereinafter referred to as Respondent) It was submitted that they are engaged in processing of natural sesame seeds and trading of "Sesame Seeds" including natural as well as hulled sesame seeds and other agriculture produce. Respondent was importing Raw Sesa....
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....same Seeds under Advance Authorization till date of Panchnama i.e. 05.09.2014. Furthermore, respondent claimed to have exported 8140.649 MT of Hulled Sesame Seeds under drawback scheme and not under Advance Authorization Scheme. Even if their exports under drawback scheme was accounted against export under Advance Authorization, there was as per the department asshortage of 1284.486 MT of imported Raw Sesame Seeds which is as detailed below. Sr. No. Description Qty (in MT) 1 Total Import 19944.560 2 Total Export required as per SION 19747.089 3 Total Export under Advance Authorization 9701.346 4 Export under Drawback and claimed under Advance Authorization 8140.649 5 Stock of Sesame Seeds available at the time of Panchnama as per books of accounts 620.608 6 Shortage of imported goods found [2-(3+4+5)] 1284.486 6.1 Statement of various persons including Shri Jay Sureshbhai Chandarana being CEO of Respondent was recorded under Section 108 of the Customs Act, 1962 on 08.09.2014 and 11.09.2014, which were exculpatory. 7. Respondents filed detailed reply to the said SCN and also appeared before the Commissioner, ....
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....ed natural sesame seeds under Advance Authorisation, Respondent had exported 17750.100 MT (9738.944 MT under Advance Authorisation and 8011.156MT under claim of drawback). Though as per SION only 1% process loss is allowed, actual process loss is/was around 13%. As per the provisions of policy after adjusting 1% permissible process loss, goods were exported. However, as per the revised norms of SION, process loss up to 33% is permissible in terms of Public Notice No. 49/2015-20 issued by the DGFT. 7.4 It is admitted fact in the SCN at para 4 as well as para 7(d) of the SCN (Page 124 and 131 of reply to appeal) that 8,140.649 were inadvertently exported under claim of draw back instead of Advance Authorisation. It was not considered only on the ground that conversion of shipping bills was not allowed by the Customs and application for amendment was made only after initiation of investigation by DRI. As discussed in para infra applications for amendments were made well before the investigation initiated by the DRI. 7.5 It is also admitted fact in the show cause notice at paragraph 7(b) (Page 124 of reply to appeal) that out of 8413.07 MT imported natural....
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....Authorization scheme but so far no such amendment has been allowed. 7.9 Respondent further submitted that it is admitted fact on records by way of panchnama dated 05.09.2014 as discussed at para 4 page 2 of the SCN that its factory premises was searched on 05.09.2014 by the officers of DRI, Jamnagar/Ahmedabad and documents related to the import and export of Sesame seeds were withdrawn under Panchnama dated 05.09.2014; that during the course of Panchnama the physical verification of stock of Sesame Seeds lying in its factory premises was conducted and total quantity was found to be 942.525 MT which included the imported as well as indigenously purchased Sesame Seeds and all types of material i.e. raw Sesame Seeds, Sesame Seeds in process, rejected Sesame Seeds and Hulled Sesame Seeds; that the books of account maintained by it showed the stock position of imported sesame seed as on 04.09.2014 to be 620.608 MT; that the record of imports and exports of Respondent was also examined and it was found that it had imported 19944.560 MT of Raw Sesame Seeds under 21 Advance Authorizations out of which it had shown export of 9701.346 MT of Hulled Sesame Seeds under Advance Authoriz....
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....80 MT of Sesame Seeds under Advance Licenses, whereas, they have exported only 9590.186 MT of Sesame Seeds against such Advance License, and stock of imported Sesame Seeds as per their books of account as on 04.09.2014 was 620.608 MT thus showing a shortage of 8544.386 MT of Sesame Seeds, he stated that they have used the said 8544.386 MT of Sesame Seeds in their factory by processing and hulling it into Hulled Sesame Seeds and out of it exported 6966.25 MT under drawback scheme instead of showing the same under Advance Licenses. He further stated that they have filed an application to the Assistant Commissioner of Customs, Custom House, Pipavav, on 05.09.2014 and two applications to the Deputy Commissioner of Customs, Custom House, Mundra on 27.08.2014 requesting them to convert their shipping bills from drawback to Advance License Scheme; that on being asked whether he agreed that during the period from February-2014 to August-2014, they continued to export the Sesame Seeds Product imported duty free under Advance Licenses, under the claim of drawback in gross violation of the actual user condition of the Advance Licenses, to which he replied that as per his opinion, actual user ....
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....cription it is mentioned as "Sesame Seeds - Sudan Red Quality", "Sesame Seeds - Hulled Autodry Sortex Semi Premium (Somalia) Quality", "Sesame Seeds - Hulled Autodry Sortex Somalia Quality", "Sesame Seeds - Korea Quality", "Sesame Seed - Natural Sortex Korean Condition", etc. and informed that from contract notes it appears that they have facilitated respondent in selling the imported sesame seeds into the local market to which he replied that the product description mentioned in the contract denotes the quality of different sesame seeds which is commonly called in the business circle. He was also shown the statement of its CEO dated 11.09.2014 in which while answering question No.16 it was stated that the product description in the contract notes were written by them without informing Respondent and asked to comment. He stated that they generate two copies of the contract one of which is for buyer and the other for seller, as such Respondent were already provided the copy of the contract and were very well aware of the description mentioned in the contract are the different names of Sesame seeds commonly known in the business. 7.14 Respondent further submitted that based on the....
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..... Based on those documents it is submitted that in total 8,011.156 MT of Hulled Sesame Seeds were processed from imported raw sesame seeds under the said Advance Authorisations and exported under claim of drawback on the date of visit of the officer of DRI i.e. on 05.09.2014. Based on those documents again it was submitted that imported goods were used for intended purpose for hulling and not diverted raw sesame seeds as such, thereby there cannot be any violation of condition of the notification and foreign trade policy, therefore, department's appeal is liable to be quashed on this ground too. 7.16 Respondent most respectfully further submitted that even other documentary evidence in the form of two applications dated 27.08.2014 duly acknowledged by the MP & SEZ Mundra for conversion of shipping bills from drawback shipping bills to Advance Authorisation (for License No. at Sr. No. 7, 9, 10 of table and for License at Sr. No. 6 of table at page 8 of the SCN for the shipping bills listed in the sheets attached with the said letters) on the ground that through oversight shipments were done in Drawback Scheme and requested for conversion of shipping ....
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....er table at paragraph 7(c) of page 8 of the SCN against the 10 Advance Authorisation 11531.49 MT imported goods, 1,369.5940MT hulled sesame seeds were already exported, therefore, as against 9,527.59156MT (11,531.490 MT less 1383.290MT process loss [1%] as per SION) respondent had exported 11,674.800MT which is more than required quantity. 7.18 Respondent further submitted that it had also made applications requesting to issue EODC and the said authority had issued EODC/Bond Waiver Letter cum Redemption letters in respect of disputed 10 Advance Authorizations as detailed hereunder:- Sr. No. DGFT's F. No. Advance Authorization No. Date of order 1 08/91/165/00901/ AM15/dated 06.02.2013 0810118206 dated 06.02.2013 30.03.2015 2 08/91/165/00200/AM16 dated 13.08.2013 0810123765 dated 13.08.2013 30.06.2015 3 08/91/165/00201/AM16/ dated 13.08.2013 0810123766 dated 13.08.2013 30.06.2015 4 91/040/00555/AM.14 and 08/91/040/00453/AM.2014 dated 19.10.2015 0810128771 dated 10.02.2014 and 0810127077 dated 13.12.2013 19.10.2015 5 08/91/040/00480/AM.2016, 91/040/00519/A....
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.... of the same, export obligations against 11 Advance Authorizations were already fulfilled before 05.09.2014; and that EODC/ Bond waiver letter in respect of the same were already issued by Joint DGFT, Ahmedabad. Brief of the case made out by DRI and its application to customs authorities for conversion of shipping bills into Advance Authorizations was also explained. Similarly, dispute about process loss in hulling industry, reference made on 13.06.2016 by Indian Oilseeds and Produce Export Promotion Council, Mumbai before the DGFT in respect of processing loss etc. were also explained. Besides, it was also clarified by the Respondent under the said letter dated 18.11.2017 that since there was no response from the concerned customs authorities regarding decision on conversion of DBK S/bills to Advance Authorization, it had fulfilled the export obligation after procuring sesame seeds from DTA against export orders in hand and within validity period of Licences; that the Licensing authority, Ahmedabad had already issued EODC/Bond waiver letters; and that the Customs authorities had also released Bonds executed by the Respondent at the port from where the goods were imported. In view ....
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....ems Pvt. Ltd. Vs. Collector of Customs, New Delhi - 2003 (151) ELT 254 (SC) 7.23 Respondent further submitted that it had claimed only 93.96 MT process losses which is less than 1% which is permissible as per SION 1%. Thereby in view of the above submission there is no violation of any of the condition of notification No.96/2009-Cus. dated 11.09.2009 as amended not to speak of condition No.(x) viz. actual user condition as well as paragraph 4.16 read with para 4.03 of the Foreign Trade Policy, 2015-16. According to actual user condition means imported raw materials as such cannot be transferred or sold even after completion of export obligation but authorization holder have option to dispose of product manufactured out of duty free inputs once export obligation is completed. Attention of the bench was invited towards paragraph 4.47 of Handbook of Procedure, 2015-16 and submitted that in case authorization holder exports first (before effecting imports) by using imported inputs/indigenously procured raw materials, in that case the Authorization Holder can seek waiver of bond condition by submitting evidence of export made and payment realized to that extent.&nbs....
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....15 of one of the brokers Shri Dinesh Tanna (hereinafter referred as the broker). As discussed in detailed in reply to appeal that in the said statements nothing specific was deposed by him against respondent at all. It was submitted that what was evident from the above deposition was that author of the statement (Shri Dinesh Tanna) did not say that sesame seeds imported by Respondent against Advance Authorization were directly sold in local market. It may be appreciated from the deposition that the broker never confirmed or even indicated that the Respondent had directly diverted sesame seeds imported against Advance Authorization. It may be appreciated from the depositions that of the broker recorded in the three statements that he had nowhere admitted or even indicated that sesame seeds imported by the Respondent under Advance Authorization were sold in local market as such or after process. He had also categorically clarified that varities of sesame seeds referred in the Contract Notes were actually the qualities of different sesame seeds which are common names in the business circle and therefore it cannot be said the same are the imported sesame seeds. ....
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.... huge quantity of 9527.592 MT as alleged in the appeal. 8.5 Respondent submitted that the learned Committee had further alleged in para 8 that the adjudicating authority had erred in accepting the importer's contention of 13% shortage as process loss as against 1% provided in SION, by citing Public Notice No. 49/2015-20 dated 03.01.2018 wherein 33% permissible loss has been provided; that revised SION is prospective and not retrospective unless otherwise specified in the Public Notice. 8.6 Respondent in this regard submitted that the above allegation also appeared to have been made without appreciating facts of the case vis a vis findings recorded in the impugned Order-in-Original dated 10.08.2018 for the following reasons: 8.7 Respondent submitted that in these circumstances discussed in reply to appeal it had argued that processing loss in the hulling industry was much more than 1% referred in the SION. It was further submitted that it had claimed process loss less than permissible 1% under SION and just to show the practically process loss was much higher than 1% and same was around 13%, reference of Public Notice was made so as to justify that in sesa....
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....d by the respondent. Instead of reading allegations in the SCN as well as selective part of the statement of one of the brokers Shri Dinesh Tanna, if the learned Committee had really gone into all these documents and submissions as well as depositions made by the CEO of the respondent, also authorized persons of two CHAs of Mundra and Pipavav ports under Section 108 of the Customs Act, 1962, result would have been different. In support of the above submissions reliance was placed upon decision of Collector of Customs Vs. Phoenix Overseas (P) Ltd. - 1992 (62) ELT 366 (Tribunal) 8.10 Respondent also invited attention of Hon'ble Bench towards Note Sheet page I to IV as well as letter dated 10.10.2018 of DRI communicating the grounds for review to the Chief Commissioner Office enclosed with RTI application (Submitted in compilation at the time of hearing) that Draft Review Order was prepared by the Superintendent based on communication received from DRI only and no independent findings were given by the learned Committee. Therefore, such review order cannot be considered as proper within the meaning of Section 129D(1) of the Customs Act, 1962. On this ground ....
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....ms. They sought to explain the deficiency in materials found during the search was due to higher process loss than permitted under SION norm which was only 1% during the impugned period. Whereas actual process loss was 13%, as stated by them. As against this Department relied upon their own assertion as contained in initial shipping bills and other documents stating the loss was as per SION norms i.e. 1%. The respondents have explained that it was their ad-interim assertion as they were not doing inventory check on day to day basis, and had also represented later to the authorities for higher percentage. They sought to justify that the actual loss was 13% which was still below revised norms of SION which indicated 33%, as permissible limit i.e. almost 33 times of the initial prescribed norms, which stood revised vide Public Notice No 149/2015-20 issued by the DGFT. They also pointed out that 1% SION norm, despite wastage of 13% was claimed by them as only the same was permissible. On the basis of their Industry representation same was later revised and raised to 33%. The period involved in the instant case though is from 24.12.2012 to 23.07.2014, it was subm....
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.... to the tune of 1284.486 MTs ticed during the course of physical stock verification carried out under Panchnama dated 05.09.2014 is also relied as evidence of diversion by the investigating agency. No other evidence of diversion is available on record. Now, I proceed to examine these evidences one Thy one hereinunder 7.1. It has been alleged in the SCN that Shri Dinesh. Jayantilal Tanna of Mis. Tirupati Agro, Rajkot, a broker in selling of imported raw materials, in his statement dated 10.09.2014, admitted that it was a trend/practice to sell the sesame imported under Advance Authorization as the importers had sufficient time to fulfil their export obligation and it is also evident from the Contract Notes No. 10847 dated 20.03.2014; 10849 dated 21.03.2014: 11098 dated 20.05.2014, 11080 dated 14.05.2014, 10786 dated 12.02.2014; 10066 dated 26.04.2013 that raw sesame seeds of Sudan and Somalia origin were sold locally by M/s. DAE However, on going through the statement dated 10.09.2014 of Shri Dinesh Jayantilal Tanna of M/s. Tirupati Agro, Rajkot, I observe that the original reply to No.4 for the said six Contract Notes was that "In this regard I have to state that the produ....
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...., I find that Mis DAF in their statements before the investigating agency, as well as their defence reply, contended that this shortage 13% approx. was due to process loss, while the DRI has allowed for only 1% process loss as per the SION norms. In this regard, they have submitted that the actual process loss in hulling industry is upto 33% (13% in their case) depending upon the raw material used and that this fact is now acknowledged by the DGFT and the permissible loss in SION IS now revised to 33% on 03.01.2018 vide Public Notice No. 49/201520. In view of the revised SION norms allowing for process loss of 33% instead of just 1% allowed earlier, I find it reasonable to accept the importer's contention regarding 13% process loss and hence, the said quantity of shortage of imported goods arrived at by the DRI cannot be accepted as evidence of diversion by M/s. DAE. As there is no other independent evidence of diversion on record, I find that the allegation of diversion of duty free goods imported under Advance License by M/s. DAE is based on assumption & presumption and is not legally sustainable. 18. Further, it is alleged in the Show Cause Notice that Mis. DAE has ....
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....e case of Commissioner of Customs (Gen) Mumbai Vs AKM Trading Corporation reported as 2067(208) ELT 406(Tri-Mum), wherein, the Hon'ble Tribunal held that; "The Decision Of The DGFT On Interpretation Of The Policy Is Final And Binding In The Light Of Apex Court Decision In The Case Tarachand Gupta & Brothers (1983(13) ELT 1456 (SC))" 22. Further. I find that on the basis of exports made by M/s. DAE against the Advance Licenses, the DGFT has issued EODC in all cases and accordingly, the Bonds submitted by them at Custom House, Mundra, for duty free import have also been discharged/released by the Assistant Commissioner of Customs, Custom House, Mundra. 23. In view of the above, I find that M/s. DAE has not violated the conditions of duty free import under Advance Licenses and therefore, the proposal for confiscation of 9527.592 MT of Raw Sesame Seeds imported by them during the period from 06.03.2013 to 05.09.2014 under various Advance Authorizations (as listed in Annexure-A to the Show Cause Notice), totally valued at Rs. 1,27,57,35,460/-, under Section 111(0) of the Customs Act, 1962, is not legally sustainable. Moreover, as the charge of diversion of....
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....023 (151) ELT 254 (S.C.) 11.2 It is also found that clarification about indigenous raw material used for short fall as well as revision of norms was on specific reference by the appellants as well as the relevant export promotion council, same was therefore rather required to be given due weightage. It rather fortifies their claim that even under old dispensation of 1% wastage SION norm, there was need to use indigenous material to meet export obligation. Same was apparently done by them. In fact, instead of diversion, the evidence on record points to rather procurement of indigenous material and this appears to have been appreciated by DGFT, as how else an industry with low 1% norm as against actual 13% (revised 33%) could have practically operated, without indigenous procurement. Later stance of DGFT therefore was most practical and pragmatic and was indeed a corrective measure to rectify the lower rate norm of 1%. By not applying the later norm to the impugned period respondents will be subjected to hardship and inconvenience. "Ab inconvenient" has to be kept in mind, while considering retrospectivity or otherwise of a beneficial change in norm. A norm being....
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....permitted usage of indigenous materials, whatever respondents did were alternate pleas and situational response till they became aware of the decisions of the concerned Ministry. 11.5 Further, we find that unless, the department is able to produce clear cut evidence of clandestine removal of material and by showing to whom it was transported, sold etc., its allegation of removal in domestic market cannot be taken as proved. All this is woefully lacking on the part of the department and therefore unproved assertion remains in the domain of bald presumption only. Statements recorded of brokers etc. are vague and do not advance department`s case. The discussion of Policy Interpretation Committee of DGFT as brought out in para 20 of the order of the Adjudicating authority, clearly indicates that sourcing material from domestic market is very much permissible to make up for deficiency. It is also noted that DGFT has issued EODC in all cases to the appellant. On the basis of such certificates, the Assistant Commissioner of Customs at Mundra port has also discharged the bond taken by it. We find that the adjudicating authority has correctly taken into account various argume....