R.F. EXPORTS Vs. COMMISSIONER OF CUSTOMS, COCHIN

JUDGEMENT

(1.) THE partys appeals in C/381/2004 and in C/417/2004 are on a common issue. The Revenues appeal and the partys appeal C/381/2004 arise from a common OIA No. 15/2004 -Cus., dated 28 -6 -2004. The appellants had imported 17335 Kgs. of shell on Shrimps (Nephrops) on 20 -11 -2002 and 16130 Kgs. of shell on Norway lobster tails (Nephrops Norvegious) on 3 -9 -2003 for job works availing the benefit of Notification No. 32/97 -Cus., dated 1 -4 -97 which exempts the goods imported into India from the whole of the duty of Customs leviable thereon. They re -exported 9060 kgs. of IQF, peeled and deveined shrimps (Nephrops) on 21 -1 -2003 and 9018 kgs. of block frozen peeler lobster on 30 -10 -2003. It is the Revenues contention that the imported goods and the one exported by the appellants are items for which no Standard Input -Output Norms (SION) had been fixed by the Government of India. The Deputy Commissioner had fixed yield for Nephrops at 63% and wastage at 37%. By applying these norms, it was revealed that the appellants are not exporting 63% of the quantities of 17335 kgs. of shells and shrimps and 16130 kgs. of shell of Norway lobster tail imported by them. In other words, it was alleged that the appellants had exported 63% of 14381 kgs. of shell on shrimp and 14314 kgs. of shell on Norway lobster tails to yield 9060 kgs. of IQF shrimps and 9018 kgs. of block frozen peeled lobster. It was alleged that since they failed to export the required quantities, they were liable for customs duty on the balance quantities of shrimps and lobsters imported by them and hence proceedings were initiated and demands were confirmed. The penalty of Rs. 5,000/ - has been set aside by the Commissioner (Appeals). The Revenue is aggrieved and has come before this Bench. C/417/2004 also challenges confirmation of demand of Rs. 34,650/ - and penalty of Rs. 1,000/ - on similar charge of non -fulfilment of export norms and shortfall in the exports from the imported quantity as detailed in the OIO No. 71/2004 dated 21 -7 -2004.

(2.) THE appellants contention is that there is no evidence of DTA clearance. The norms fixed by the Deputy Commissioner was on scientific basis and not on the basis of actual yield that would arise. They had produced a Certificate from the Head of the Central Institute of Fisheries Technology. By their Certificate dated 6 -1 -2004, who after complete examination of the samples provided by the Central Excise, have opined as follows : - This is to certify that when frozen HL shell on Lobster Tails are converted to peeled and deveined frozen Lobster meat (Nephrops norwegicus) under scientific conditions and factory conditions there is a likelihood of change in the yield. In factory since a large number of workers are involved, the yield obtained will be varying significantly from worker to worker so that the average yield in factory condition will be showing a difference of 5% from the scientific yield. Besides this there will also be difference in yield depending on sampling. If individual samples of lobster vary in size, berried condition etc. statistical sampling will be required for getting a valid yield. As the samples provided by the Central Excise was not drawn based on statistical scale another 5% yield variation is also likely. Thus yield in factory condition can vary up to 10% from the yield worked out in a scientific lab from single sample. The learned Counsel submits that in terms of the above Certificate, they are eligible for benefit up to 10% and the scientific lab method adopted by the DC is not sustainable. He submits that no reasons have been given for rejecting the Certificate issued by the CIFT of Government of India. In terms of this Certificate, they have specified the norms fixed by the DC and their export is to the extent of 63% as fixed by the DC.

(3.) THE learned SDR submitted that although the certificate was before the authorities, but the authorities have not considered the same. He submits that the matter could be remanded for de novo.