TaxTMI 
TaxTMI 
2003 (1) TMI 154
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....raw material supplied by M/s. LSLL, after they had obtained permission from the Assistant Commissioner of Customs, Customs Division, Bangalore vide letters C. No. VIII/48/4/99-EOU-II, dated 3-2-99 and C. No. VIII/48/54/98-EOU-II, dtd. 30-12-98 for undertaking this jobwork within their bonded premises for LSLL. (ii) Duty drawback of Rs. 93,14,838.97 has been paid to LSLL. Duty drawback of Rs. 28,44,812/- was pending sanction. (iii) M/s. LSLL had filed all the shipping bills under EDI system where no provision for export by 100% EOUs, had been made on the dates of filing of Shipping Bills. (iv) The shipping bills were filed based on their own invoices and that they were shipments of Readymade Garments allegedly manufactured at 100% EOUs i.e. M/s. Sara International Inc. and M/s. Tropicate Textiles Ltd. These third party names were not indicated anywhere in the Shipping Bills or the invoices filed by LSLL as required under Para 3.54 of the EXIM policy and Circular 74/99, dtd. 5-11-99. (v) The readymade garments, on job work basis by t....
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....f omission and commission as above. 4.Commissioner after rejecting the appellant's contention and coming to his findings, ordered the recovery of duty drawback amounting to Rs. 93,14,838.97 already paid to M/s. LSLL under the provisions of Rule 16 of the Central Excise Rules, along with interest under Section 75A and rejected the claim of Rs. 28,44,812/- pending sanctions and after ordering the appropriation of the amounts deposited, imposed a penalty of Rs. 1,21,59,651.97 on M/s. LSLL under Section 114(iii) of the Customs Act, 1962, as he found that the goods which were alleged to be exported were liable for confiscation under the provisions of Section 113(i) of the Customs Act, 1962. 5Similar issues and charges, as raised in. these proceedings, except for the charges that the name of the two 100% EOUs was not indicated anywhere in the shipping bill or invoices as required under Para 35 of the EXIM Policy and Circular No. 74/99, dated 5-11-99 and the proposals for liability of confiscation under Section 113(i) and penalty under Section 114(iii) for the same export on M/s. LSLL, and the same EOUs, this Bench vide its Order No. F/2/2003, dated 2-1-2003 in the case of M/s. LSLL....
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....s. (N.T.) and 31/99-Cus. (N.T.), viz. :- The rates of drawback specified in the"2. said Table shall not be applicable to export of any of the commodities/products if such commodity/ product is - manufactured partly(a) or wholly in a warehouse under Section 65 of the Customs Act, 1962 (52 of 1962), ……………………… Manufactured and/or exported by a unit licensed as hundred per cent export oriented undertaking in terms of the relevant provisions of the Import and Export Policy in force......................" and as to who is the owner, manufacturer and exporter of these goods in the case of the same appellant vide Order No. F/2/2002, dtd. 2-1-2003, it has been found as follows :- 'Garments' falling under Chapter 61 or"(i) 62 of the tariff, are a commodity sui generis and for production thereof, the Raw Material Supplier is considered to be a manufacturer under the Central Excise Act, 1944 vide Rule 4(3) of the Central Excise Rules, 2002, which reads as under: - "Notwithstanding anything contained in sub-rule (1), every person who gets the goods, falling under Chapter 61 or 62 of the First Schedule to the Tariff Act, produced or manufactured on hi....
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....assured and maintained at this meeting. The Commissioner's finding on this plea of the appellants are therefore rejected, since the minute do not show any purported meaning, as held by the Commissioner. The minutes when read plainly prescribe, that the procedure should be followed and shipping bill should be filed by the owner who will be eligible for the benefit. M/s. LSLL in this case have filed the same and the drawback amounts on the same as claimed, have been correctly sanctioned to them. We do not uphold the Commissioner's finding to upset that grant made as per this promise made to EOUs and others by the very Commissioner, Bangalore. Considering General Note No. 2(a) of Notfn. No. 67/98-Cus. (N.T.),(iii) dtd. 1-9-98 which reads as under: - "manufactured partly or wholly in a warehouse under Section 65 of the Customs Act, 1962 (52 of 1962)" and the Commissioner's findings thereon, it is found that Section 65 of the Customs Act provides for manufacture of the goods in a warehouse licenced under Section 58 of the Customs Act, 1962. This Section reads as under: - "65. Manufactured and other operations in relation to goods in a warehouse - (1) With the sanction of the....
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....), dtd. 1-9-98(iv) by clause 2(c), which reads as under: - "(c) Manufactured and/or exported by a unit licensed as hundred per cent export oriented undertaking in terms of the relevant provisions of the Import and Export Policy in force........." it is found, the interpretations and the findings arrived at by the Commissioner cannot be sustained. If these goods are considered as manufactured and/or export of an EOU, then that would count towards the export performances of the EOU and the Import Policy, does not permit any such counting of such exports of an EOU. The Readymade Garments, in this case, have been found to be understood as having been manufactured by M/s. LSLL and are owned and exported on a Drawback Shipping Bills allowed to be filed by the proper officer of Customs. They are not fabricated/manufactured in a warehouse under Section 65 as arrived at herein-above, after considering the provisions of the said Section 65 of the Customs Act, 1962. In that view of the matter, the Readymade Garments in this case cannot be considered to be manufactured and/or exported by an EOU. Admittedly, after removal from the EOU on transhipment shipping bills, the proper officers ha....
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....records of the case I find that Shri Manoharan Nair in his statement, inter alia, stated that when the goods were produced on job work basis in an EOU as 'usually' they do not indicate in the Shipping Bills whether the goods are manufactured by them in their own unit or subcontracted outside and regarding the requirement under Para 3.54 of EXIM Policy it has been stated that the shipment are not treated as third party shipment, but only as jobwork, whether by an EOU or DTA Unit. It has been admitted by them that the manufacturer's name (100% EOUs viz., M/s. Sara International Inc. and M/s. Tropicate Textiles Ltd., should have been mentioned along with the third party M/s. LSLL. As already discussed the Shipping Bills were filed by M/s. LSLL under EDI system where no provision for export by 100% EOUs had been made on the dates of filing of Shipping Bills. Further the Shipping Bills were filed on the basis of their own invoice and they claimed duty drawback at the rate applicable for sub-serial No. 62.01 of the Table annexed to the Notfn. No. 67/98-Cus. (N.T.), dtd. 1-9-98 as amended and Notfn. No. 31/99-Cus. (N.T.), dtd. 20-5-99 as amended. Para 3.54 of the EXIM Policy 1997-2002 sti....
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....s have already been exported and not available for confiscation will be kept in mind while imposing penalty. Therefore, the submissions made by the Noticees that the 'goods' exported correspond in the material particulars to the 'goods' covered under various Shipping Bills detailed in the Annexures to Show Cause Notice has no substance and the decision in the case of Northern Plastic Ltd. v. Collector of Customs & Central Excise — [1998 (101) E.L.T. 549 (S.C.)] relied upon by them is of no avail, as the submission completely overlooks the provisions of Customs Act, 1962 read with the Customs and Central Excise Duties Drawback Rules, 1995. The fact that the 'goods' are manufactured by 100% EOUs has not been indicated on the Shipping Bills and claimed undue benefit of duty drawback which the DTA Unit was not entitled to, by virtue of Notfn. No. 67/98-Cus. (N.T.) and Notfn. No. 31/99-Cus. (N.T.), I am constrained to impose a penalty under Section 114(iii) of the Customs Act, 1962 on M/s. Leela Scottish Lace Ltd., Mumbai." Considering the findings in this para, it is found: - (i) Para 3.54 of the EXIM Policy is only a definition of the term 'third party exports' and it reads as....