COMMISSIONER OF C. EX., HYDERABAD Vs. HYDERABAD APPARELS

JUDGEMENT

(1.) THIS is a revenue appeal against OIA No. 42/04 -Cus., dated 14 -5 -04 passed by Commissioner (Appeals) setting aside the demands raised against a 100% EOU who are manufacturing readymade garments and textiles. The finding recorded by the Commissioner is reproduced herein below. I feel that appellants contention that action to initiate recovery of duty and other dues from a 100% EOU without due clarification from the Development Commissioner with regard to the unit disregarding Tribunals orders in various cases was bad in law, has to be decided before delving into any other issue in the matter. The appellant had cited the case of ABN Granites Ltd. v. CCE, Cochin reported in 2001 (133) E.L.T. 483 (T) in support of their contention. On examination of the case file, I have seen that no reference is made to the Development Commissioner in this regard before adjudicating the case. There is no reference in the impugned order also to the effect that the case has been referred to the Development Commissioner. The appellants are 100% EOU and as per allegations in the show cause notice, they had failed to fulfill the export obligation within the stipulated period. That being so, the recovery proceedings for recovery of customs duty for having imported the capital goods and the raw material at Nil rate of duty under Notification No. 13/8, dated 9 -2 -81, could only be taken after seeking the order from the Development Commissioner specifically to the effect that the appellants had failed to fulfill the export obligation, in terms of circular No. 29/95, dated 10 -3 -95 issued by the Ministry of Finance. Since this procedure is not followed in the instant case, there is no other option open to me except to set aside the impugned order following the ratio of the order of the Tribunal in the case of ABN Granites Ltd. v. CCE, Cochin reported in 2001 (133) E.L.T. 483 (T) cited by the appellant and the order of the Tribunal in the case of Grapco Industries Ltd. v. Commissioner of Customs, Jaipur reported in 2002 (149) E.L.T. 932 (Tri. -Del.). As can be seen from the above order, the Commissioner has not confirmed duty of Rs. 3615/ - on bath robe valued at Rs. 5,300/ - sold by the appellant without permission for clearance in DTA and without payment of duty.

(2.) LEARNED DR submits that the assessee had cleared capital goods without permission from the Development Commissioner and they had entered into a job work without any intimation to the department. Therefore, the Commissioner ought to have confirmed the entire amount with regard to the DTA sale.

(3.) I have carefully considered the submissions made by the Revenue in this appeal and have perused the extracted portion of the Commissioners Order setting aside portion of the impugned order in terms of the judgment cited by the Commissioner in the order extracted with regard to the item sold without permission and without payment of duty. The Commissioner has already confirmed the demands as noted. The Commissioner has rightly noted the Tribunal citations to hold that demands cannot be confirmed without reference being made to Development Commissioner. There is no dispute on this point. Therefore, the impugned order is in the light of the judgments discussed therein and there is no merit in this appeal. The same is rejected.