TaxTMI 
TaxTMI 
2025 (6) TMI 1442
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....ich was imported duty-free to be consumed for the specific purpose i.e., for the manufacture and export of garments towards fulfillment of export obligation. On investigation and based on evidences recovered, it was found that only 4,15,118 sq. mtrs. were consumed in the manufacture of garments. Hence, show-cause notice was issued demanding duty on the differential quantity of fabrics found not to have been consumed in the manufacture of export goods. Admittedly 76,274 sq. mtrs. of the imported fabric was used in the manufacture of garments which were cleared for export under claim for drawback. Accordingly, the Commissioner denied the benefit of exemption Notification No.51/2000-Cus. dated 27.04.2000 and confirmed the demand of duty of Rs.1,48,13,889/- along with interest under proviso to Section 28(1) of the Customs Act, 1962 read with Section 28AB of Customs Act, 1962. In addition, total quantity of 1,33,978 Sq. mtrs. of fabric valued at Rs.1,85,87,119/- imported duty-free but diverted, was held liable for confiscation under Section 110(o) of Customs Act, 1962; another quantity of 30,728 Sq. mtrs. fabric was also held to be liable for confiscation under Section 111(o) of the Cus....
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....n Rs. Value in USD 1. 0710016027 06.9.02 34703 5872615.18 121460.50 35514 8340136.10 173299.60 2. 0710007077 22.1.01 48656 14835336.04 318696.80 47870 14800122.89 315994.04 3. 0710007206 1.12.01 25748 8581888.50 184358.50 26534 8153855.70 174617.03 4. 0710007192 01.2.01 63226 19277765.46 414130.30 63364 19600444.79 418370.16 5. 0710007191 01.2.01 41257 13141933.81 282318.66 43584 10044758.38 218087.28 6. 0710015308 01.8.02 16600 2427750.00 49800.00 15756 2283220.44 47268.00 7. * 0710015309 0710015309 01.8.02 24650 21150 5450250.00 4639781.25 111800.00 95175.00 22524 18960 5620605.48 4762394.28 116431.20 98611.20 8. 0710013156 26.3.02 34600 5453825.00 112450.00 35754 7704097.72 158527.50 9. 0710014290 01.6.02 35430 6443831.25 132862.50 40310 8809443.02 191654.60 10. 0710007971 04.4.01 1415 530973.63 9268.25 Nil Nil Nil Total 326285 82016168.87 1737145.51 331210 8,53,56,684.52 ....
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....y. PCS Value in Rs. Value in USD Qty. PCS Value in Rs. Value in USD At Chennai against 5 Advance Licenses 63994 14016211.00 291035.72 52644 11075680.03 235390.50 At Bangalore against 10 Advance Licenses 305135 77376387.62 1641970.51 312250 80594290.24 1715638.21 369129 91392598.62 1933006.23 364894 91669970.27 1951028.71 2.2 Thus, in respect of the 15 Advance Licenses issued to the Appellant as against the 3,69,129 Pcs of garments to be exported in terms of the export obligation fixed by the JDGFT, the Appellant actually exported 3,64,894 Pcs, which is marginally short by 4,235 Pcs. As against USD 19,33,006.23 / Rs.9,13,92,598.62 to be realized in terms of the export obligation fixed by the JDGFT, they have realized USD 19,51,028.71 / Rs.9,16,69,970.27, which is higher than the Export Obligation fixed by the JDGFT. Thus, having achieved the Export Obligation as stipulated by the JDGFT, left to themselves they would have approached the JDGFT for regularization in ter....
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....e drawback claimed amounting to Rs.15,68,943/- in terms of the second proviso to Rule 3 of the Customs & Central Excise Duties Drawback Rules, 1995. 2.4 It is further stated that in terms of the Standard Input Output Norms (SION) J270 for the manufacture of one piece of Ladies Shirt (Full Sleeve) the fabric permitted to be imported for the garment is 2.75 Sq. Mtrs. Under J271 and for Ladies Shirt (Half Sleeve) the fabric permitted to be imported for the garment, is 2.20 Sq. mtrs. As against the above SION, the Appellants imported on an average only 1.97 Sq. mtrs.(total fabrics imported 7,18,325.75 Sq. mtrs. divided by total garments exported 3,64,894 Pcs = 1.97 Sq. mtrs. per garment). The Appellants are entitled to import fabrics for the manufacture of garments in terms of SION J270 and J271 for the manufacture of ladies shirts, full sleeve and half sleeve respectively. The higher margin has been given by the Licensing Authorities to cover wastage of fabric in terms of Para 4.1.1 of the Exim Policy, which clearly permits 'normal allowance for wastage' during manufacture, rejection of garments during quality control, defects in the fabrics imported and other contingencies such as....
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....The Authorized Representative for the Revenue reiterating findings of the Commissioner relied upon the judgment in the case of Sheshank Sea Foods Pvt. Ltd. Vs. Union of India 1996 (88) ELT 626 (S.C.) and Kamath Packaging Ltd. Vs. Union of India 1992 (61) ELT 548 (Kar.). 4. Heard both sides. The major issue in this appeal is whether the appellant had fulfilled the export obligation in respect of 10 advance licenses valid for 18 months issued under Customs Notification No.51/2000-Cus. dated 27.04.2000 and Notification No. 43/2002-Cus dated 19.04.2002 and the relevant provisions applicable are of the Export/Import Policy 1997-2002 and 2002- 2007 and the demands as per the impugned order are as follows: Table-4 (as per the SCN) As against the above demands in the show cause notice, we find that based on the DEEC license details placed on record that the export obligation fixed by DGFT vis-à-vis the export obligation fulfilled by the appellant is as follows:- Table - 5 Details as seen from the DEEC Book placed on record Sl. No Advance License No. Date Export Obligation Fixed by DGFT Export Obligation Fulfilled ....
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....ments. 4.2 Now to examine the remaining licenses for verification of whether the appellant has fulfilled the export obligations as required by DGFT in terms of DEEC License, one needs to examine the relevant Notifications along with the provisions of the Foreign Trade Policy (FTP) read with procedures laid down by the DGFT, which are reproduced below : Notification No. 51/2000-Cus., dated 27-4-2000 Materials imported under Duty Exemption Entitlement certificate issued in respect of the value, quantity, description, quality and technical characteristics - Exemption In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts materials imported into India, against an Advance Licence issued in terms of paragraph 7.2 of the Export and Import Policy 1997-2002 notified by the Government of India in the Ministry of Commerce vide notification No. 1/1997-2002, dated the 31st March, 2000 (hereinafter referred to as the said licence), from the whole of the duty of customs leviable thereon which is specified in....
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....may allow; (vii) that the said licence and the materials shall not be transferred or sold; (viii) that in relation to an Advance Licence issue to a Merchant Exporter, - (a) the name and address of the supporting manufacturer is specified in the said licence and the said certificate and the bond required to be executed by the importer in terms of condition (ii) shall be executed jointly by the Merchant Exporter and the supporting manufacturer binding themselves jointly and severally to comply with the conditions specified in this notification; and (b) exempt materials are utilised in the factory of such supporting manufacturer for discharge of export obligation by the said merchant exporter. 2. Where the goods are found defective or unfit for use, the said goods may be re-exported back to the foreign supplier within 3 years from the date of payment of duty on the importation thereof: Provided that at the time of re-export the goods are identified to the satisfaction of the Assistant Commissioner of Customs or Deputy Commissioner of Customs as the goods which were imported. Explanation. - In this notification, - ....
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....rts. (ii) Merchant exporter where the merchant exporter agrees to the endorsement of the name(s) of the supporting manufacturer(s) on the relevant DEEC Book and In the case of deemed exports, sub- contractor(s) whose name(s) appear in the main contract. Such licences and/or materials Imported thereunder shall not be transferable even after completion of export obligation. Such licences shall be issued with a positive value addition. However, for exports for which payments are not received in freely convertible currency, the same shall be subject to value addition as specified in Appendix- 39 of Handbook (Vol.1), 1997-2002. Advance Licence shall be issued in accordance with the Policy and procedure in force on the date of issue of licence and shall be subject to the fulfilment of a time bound export obligation as may be specified. 7.13 The value addition for the purposes of this chapter shall be: VA = A-Bx 100, /B where VA is Value Addition A is the FOB value of the export realised /for value of supply received. B is the CIF value of the imported inputs covered by the licence, plus any other imported ma....
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....6.2002 and No.0710013156 dated 26.03.2002 and No.0710007971 dated 04.04.2001, No.0710015308 and No.0710015309 both dated 01.08.2002 were issued by DGFT only in the case of 7 licenses since export obligations were already fulfilled under the other 3 licenses as discussed supra. With regard to these show-cause notices, the appellant had submitted that the export obligations were overall fulfilled and hence requested to grant them the facility of clubbing in terms of para 4.20 of the Handbook of Procedures 2004-09 in respect of all the above advance licenses. In response to the request the DGFT New Delhi vide letter dated 02.03.2009 had stated that the Committee had accepted their request for revalidation and extension; and directed the appellant to approach the concerned Regional Authority for clubbing. The letter is reproduced below : 4.5 Accordingly, vide letter dated 29.08.2009, the appellant had approached the Regional DGFT Authority requesting for clubbing and issue of EODC against number of licenses, which we understand is still pending with the DGFT. Since, DGFT Delhi has accepted their request for revalidation/extension in ex....
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....tionate duty payable potem L+M+N+O) in Rs A 8 C 0 E F G H 1 J K L M N 0 P 0 - 710007077 96616 14434134 710007077 49662 96006 15469068 77993 2986 817747 5467 0 6008 0 1714315 1212191 710007077 710008328 264 502 74131 460 0 0 0 0 0 0 0 0 710007206 55357 8192844 710007206 26534 55585 8171715 41460 16921 5176442 26799 0 10068 O 5430167 3836050 3 710007192 122032 18231853 710007192 58879 118470 17988936 89347 7912 2279882 14509 0 1887 C 2449521 1732057 710007191 83339 12531903 710007191 17076 32039 4043415 31986 7428 1703331 16020 0 29946 C 6907729 4884454 710007191 710016027 2100 4515 479325 5387 C O 0 0 0 0 C 0 5 710016027 74610 4832876 710016027 33414 71840 8405178 70346 0 977 258950 2218 0 2046 0 276927 178119 6 710007971 2415 360665 O 0 0 0 0 0 0 0 O 2415 0 362250 256147 A 710013156 48699 4527113 710013156 22095 30555 4723428 34489 0 0 0 30728 0 0 2770153 1783702 710013156 . O 0 C 0 0 1104 261360 1852 . O 41 0 191184 123104 710014290 64702 5824155 710014290 19001 64191 4773255 32053 5949 1449578 9409 0 2170 2573 1208307 778016 710014290 710020830 43 99 10993 93 0 0 0 0 0 0 0 0 9 710015308 24956 2120538 71005308 15756 ....