AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2003 (1) TMI 184
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.... from the second appellant M/s. Leela Lace International Ltd. (hereinafter referred to as "LLIL", the second appellant), an Export Processing Zone Unit (hereinafter referred to as 'EPZ Unit') at Cochin. The Readymade garments in these three Shipping Bills were manufactured in the EPZ premises and removed from there and exported through Tuticorin Port. 3. A Show Cause Notice was issued alleging that : - (a) the export goods manufactured in any 100% EOU/ EPZ Units are not entitled to drawback under the provisions of Customs and Central Excise Drawback Rules, 1995. In the instant case, the goods exported by M/s. LSLL under 7 Shipping bills referred to above which were manufactured by 100% EOUs viz., M/s. Tropicate Textiles Ltd., Bangalore, and M/s. LLIL, Cochin an EPZ Unit, who had undertaken the jobwork for the DTA Unit viz., M/s. LSLL without obtaining permission from the Customs authorities for utilizing the spare capacity of 100% EOUs. (b) Therefore it appeared that M/s. LSLL have fraudulently claimed duty drawback to the tune of Rs. 3,72,947/- on the FOB value Rs. 23,28,105/- without mentioning the fact in the Shipping Bills to t....
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....both sides and considering the material, it is found : - (a) On the interpretation of Notfn. No. 67/98-Cus. (NT) and 31/99-Cus. (NT), especially the exclusion clauses of Para 2(a) and (c) thereof and the question of goods which were got fabricated in an EOU by a DTA Unit who owned and supplied the raw material, the following findings had been arrived at in Final Order No. F/2/2003, dated 2-1-2003 in M/s. LSLL own case : - "(i) 'Garments' falling under Chapter 61 or 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 his account in jobwork, shall pay the duty leviable on such goods, at such time and in such manner as may be specified under these rules. Whether the payment of such duty be secured by bond or otherwise, as if such goods have been manufactured by such person." Law e....
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....s meeting. The Commissioner's finding on this plea of the appellants are therefore rejected, since the minutes 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. (iii) Considering General Note No. 2(a) of Notfn. No. 67/98-Cus. (N.T.), dated 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 Assistant Collector of Custom....
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...., 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 transshipment shipping bills, the proper officers have allowed M/s. LSLL to file the ....
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....showing themselves as the exporter but were made on the declaration, invoices and Shipping Bills filed and accepted for the subject exports by LSLL and drawback paid to them. From these admitted facts, it is apparent that the goods that were removed from an EOU and the EPZ, were not exported as such, but were the goods of an exporter, who in this case is M/s. LSLL. (c) From the impugned order, Para 73 which reads as under :- "73. Regarding the above discrepancy in the declarations, I find from the records of the case that M/s. Leela Scottish Lace Ltd., Mumbai - DTA Unit have not mentioned that the "goods" are manufactured on jobwork basis by the 100% EOU/EPZs Unit while filing the above 7 drawback Shipping Bills. In view of the above fact, it is clearly established that M/s. Leela Scottish Lace Ltd., Mumbai have fraudulently claimed duty drawback to the extent of Rs. 3,27,497/- on the FOB value of Rs. 23,28,105/- without mentioning the fact in the Shipping Bills alongwith enclosures to the effect that the exported "goods" were manufactured in their 100% EOU and EPZ Unit at the time of filing the above Shipping Bills and have suppressed the facts from....
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....f various persons not withstanding, since those statements are interpretations of the deponents, and not the correct position of law, as to the owner, manufacturer and exporter of the subject goods. Therefore, not scoring the clauses, which have been held to be a cause for invoking liability for confiscation in Para 73 of the impugned order, cannot be upheld. Once, liability for confiscation under Section 113(i) is not found, as also there is no other allegation of mis-declaration of material facts about description, value, and quantity of the goods under export, the penal clause under Section 114(iii) as invoked and applied on the exporter and the other appellant viz., M/s. LLIL cannot be upheld. (d) The Commissioner has denied cross-examination, in finding arrived at in Para 74 of the Order, which reads as under : - "74. M/s. Leela Scottish Lace Ltd., have in their reply file to the Show Cause Notice requested for cross-examination of the deponents who had deposed that the seals had been tampered with at the directions of M/s. Leela Scottish Lace Ltd., Mumbai. The request of the noticee was not considered as copies of all the statements were provided to ....