NAHAR INDUSTRIAL ENTERPRISES Vs. COMMR. OF C. EX.

JUDGEMENT

(1.) THE applicants filed this application for waiver of pre -deposit of duty of Rs. 29.68 lakhs and Rs. 98.66 lakhs and penalty of Rs. 12.28 crore.

(2.) HEARD both sides. The applicant is a 100% export oriented unit engaged in the manufacture of cotton yarn. The applicants were permitted to clear 50% of their export of FOB value in the domestic value area. The applicants also cleared cotton waste during the relevant period. The Revenue raised the demand on the ground that the DTA sale of cotton yarn and cotton waste taken together exceeds the limit of 50%. Therefore, the applicants were required to pay the excise duty at full rate without the benefit of Notification No. 8/97.

(3.) THE Revenue relied upon the Board circular dated 25 -5 -1999 in support of their claim. The Circular provides that DTA sales on all accounts for all sectors will not exceed 50% of FOB value of previous financial year export. Para 9.9 -B of Exim Policy provides that entire production of EOU shall be exported subject to 50% sale to DTA on payment of applicable duties. In respect of waste there is a separate para 9.20 of the Exim Policy provides that waste arising out of production process may be sold to DTA on payment of applicable duties.