GINNI INTERNATIONAL LIMITED Vs. CCE, JAIPUR

JUDGEMENT

(1.) ARGUING the application for waiver of pre -deposit of duty of Rs.37,40,579/ - and a penalty of Rs.5 lakhs, Shri V.Lakshmi Kumaran, ld.Advocate submits that the applicant is 100% export oriented unit engaged in the manufacture of cotton yarn and woven fabrics. Apart from physically exporting the yarn and fabrics, the applicant is also selling them in domestic tariff area to the other EOUs. He submits that the applicant is entitled to sell in DTA 50% of FOB value of export (sic) on payment of applicable duty. He submits that the Development Commissioner, Nodia Export Processing Zone granted them permission to sell 50% of FOB value of physical export and deemed export in terms of para 9.10 of the Policy. He submits that the applicant was permitted to sell the goods in DsaTA to the tune of Rs.999.38 lakhs for the quarter April to June 99 and Rs.801.69 lakhs for the quarter July to September 1999. He submits that the Commissioner alleged that the applicant was entitled to only 50% of FOB value of physical export and not deemed export. He submits that both provisions of Section 3A of the Central Excise Act, 1944 and proviso to Notf.No.8/97 used the term allowed to be sold. He, therefore submits that once the applicant has been allowed to sell this and permission is accorded by the Development Commissioner there should be no objection. For this purpose, he cites and relies upon para 18 of the Apex Court's decision in the case of Siv Industries Limited (2000 (117) ELT 281 (SC). He submits that since the Development Commissioner had computed the value for which they could sell the goods there was no authority with the Customs to recompute it. He, therefore prays that the value was correctly computed and since the applicant was entitled to the benefit of 50% FOB value of not only physical e export but also deemed export, therefore pre -deposit of duty and penalty may be waived.

(2.) SHRI S.N.Singh, ld. DR. opposed the request and submits that the applicant was entitled to only 50% of the FOB value of physical export and not deemed export. He refers to the relevant paras of Export and Import Policy, 1997 -2002. He submits that the Commissioner in the Order -in -Original at page 6 of the paper book observed that "It is an admitted fact that Development Commissioner granted permission up to September, 99 on the basis of total exports including deemed export and from quarter ending December, 1999 granted permission taking into account only physical exports, the matter was re -examined in the light of clarification F.No.305/48/2000/FTT dated 7.4.2000 issued by CBEC in this regard which is by virtue of being clarificatory in nature, is applicable retrospectively, wherein it was clarified that entitlement was to be counted on the basis of physical export only. Therefore it is to be held that assessee had taken excess permission up to quarter ending September, 1999." Ld.DR, therefore submits that applicant may be directed to deposit the entire duty as well as penalty.

(3.) WE have heard the rival submissions. We note that the permission was to be granted by the Development Commissioner. We further find that the Development Commissioner has taken two criterions for determination of FOB value eligible of sale in the DTA. Thus, the issue is arguable and having regard to all the facts of the case, we direct the applicant to deposit a sum of Rs. 5 Lakhs on or before 23.6.2001. On deposit of this amount, balance amount shall be dispensed with and recovery thereof shall remain stayed during the pendency of the appeal. Non compliance of the order shall lead to vacation of stay and dismissal of the appeal without any further notice.