TaxTMI 
TaxTMI 
TaxTMI 
2025 (6) TMI 1442
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....or 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 Customs Act, 1962 and quantity of 43,277 Nos. ....
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....0 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 1814249.41 * The Export obligation fixed and fulfilled includes export obligation fixed and fulfilled at Chennai is adjusted. 2.1 The Learned Counsel further referring to the 10 Advance Licenses against which the Imports / Exports were made at Bangalore, which are pa....
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....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 terms of Para 4.20.1 of the Handbook of Procedures (HBP)of the Exim Policy 2002-07 which permits clubbing of all Imports and Exports of more than one Advance License for the purposes of redemption and regularization. Accordingly, the Appellants vide their letter dated 19.9.2006 approached the Regional JDGFT to facilitate the clubbing of the 10 Advance Licenses issued to them and thereafter, approached DGFT, New Delhi vide their letter dated 4.8.2008 requesting for the facility of clubbing of clearances in respect of all the 14 Advance Licenses issued to them. In response the DGFT, New Delhi, vide letter dt. 2.3.2009 informed as follows: "In this connection, I am directed to say that the request was considered in the Policy Relaxation Committee (PRC) Meeting No. 10/AM'09 held on 19.2.2009 (Case No. 19) under the Chairmanship of Shri.....
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....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 colour variations etc., which has been totally ignored by the investigating agency as well as the Commissioner. Further, it is submitted that Advance License for garments, the fabric that required is based upon an estimate that is given by the Master Designer/Pattern Maker of the overseas buyer and the specifications mentioned therein and such estimates take into account the wastage of fabrics at the time of importation, storage, manufacture and storage of finished garments before export and considering these factors the DGFT while fixing the Standard Input-Output Norms (SION) provides for certain extra allowance. In the instant case, since garments are customer specific, no SION is fixed in each case, the Licensing Authority fixes and approves the SION after evaluating the information given in the individual applications. There is a possibili....
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.... 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 Qty. PCS Value in Rs. Value in USD Qty. PCS Value in Rs. Value in USD 1. 0710016027 6.9.02 *35990 5872615.18 121460.50 35514 8340136.10 173299.60 2. 0710007077 22.1.0 1 *53580 14835336.04 318696.80 47870 14800122.89 315994.04 3. 0710007206 1.12.0 1 *43538 8581888.50 184358.50 26534 8153855.70 174617.03 4. 0710007192 1.2.01 *67644 19277765.46 414130.30 63364 19600444.79 418370.16 5. 0710007191 1.2.01 *45416 13141933.81 282318.66 43584 10044758.38 218087.28 6. 0710015308 1.8.02 16600 2427750.00 49800.00 15756 2283220.44 47268.00 7. 0710015309 * 1.8.02 24650 5450250.00 111800.00 *22524 5620605.48 116431.20 8. 0710013156 26.3.0 2 *45800 5453825.00 112450.00 35754 7704097.72 158527.50 9. 0710014290 1.6.02 35430 6443831.25 132862.50 40310 8809443.02 191654.60....
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....the said Customs Tariff Act, subject to the following conditions, namely :- (i) that the materials imported are covered by Duty Exemption Entitlement Certificate (hereinafter referred to as the said certificate), issued by the Licensing Authority in the form specified in the Schedule annexed to this notification, in respect of the value, quantity, description, quality and technical characteristics; (ii) that the importer at the time of clearance of the imported materials executes a bond with such surety or security and in such form and for such sum as may be specified by the Assistant Commissioner of Customs or Deputy Commissioner of Customs binding himself to pay on demand and amount equal to the duty leviable, but for the exemption, on the imported materials in respect of which the conditions specified in this notification have not been complied with, together with interest at the rate of twenty four per cent per annum from the date of clearance of the said materials; Provided that the bond shall not be necessary in respect of imports made after the discharge of export obligation in full. (iii) that the said licence and the said certificate are produced before the proper ....
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....ts, computer software and parts required for manufacture of resultant product and which are incorporated in the said resultant product specified in Part E of the said certificate; (b) mandatory spares within a value limit of 10% of the value of the licence which are required to be exported along with the resultant product; FTP policy 1997 -2002 Duty Exemption/Remission Schemes 7.1 The Duty Exemption Scheme enables import of inputs required for export production. The Duty Remission Scheme enables post export replenishment/ remission of duty on Inputs used in the export product. 7.2 An Advance Licence is issued under Duty Exemption Scheme to allow Import of Inputs, which are physically incorporated in the export product (making normal allowance for wastage). In addition, fuel, oil, energy, catalysts etc. which are consumed in the course of their use to obtain the export product, may also be allowed under the scheme. Advance Licence can be Issued for: - a) Physical exports b) Intermediate supplies c) Deemed exports. Advance Licenses can also be Issued on the basis of annual requirement for exports/supplies as mentioned at (a) to (c) above in accordance with the conditi....
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....the customs was premature, seems to be justified, inasmuch as the export obligation is to be discharged within the period specified in the said certificate or within such extended period as may be granted by the Licensing Authority by exporting resultant products manufactured in India which are specified in Part 'E' of the said certificate as shown below : Part-E Resultant products 1 2 3 4 5 6 7 Sl.No. Description Quality Technical Characteristics Quantity FOB value in Rs./US$ S. No. of the material in Part - C In fact, the DGFT while issuing the Export Obligation Discharge Certificates (EODC) for the purpose of Customs Authorities that takes into account the CIF value of the license and the FOB value based on the formula at Para 7.13 of the FTP policy to check the value addition achieved and accordingly, in terms of para 4.26 of the Handbook of Procedures issued the discharge certificate for the 3 licenses as discussed at para 4.1. wherein the Export Obligation Discharge Certificate had already been issued by the authorities concerned. Therefore, the question of looking into the actual consumption of fabric in square meters does not arise unless there i....