WE ARE JEWELLERS Vs. COMMISSIONER OF CUSTOMS, COCHIN

JUDGEMENT

(1.) This is an appeal filed against the Order -in -Appeal No. 28/2002, dated 20 -3 -2002 passed by the Commissioner of Customs (Appeals), Cochin.

(2.) THE appellant was functioning in Cochin Export Processing Zone (CEPZ), Cochin and the imports made by the appellants unit were covered by the exemption Notification No. 256/87 -Cus., dated 2 -7 -1987 by which specified goods were allowed to be imported for manufacture and export of jewellery under this scheme notified by the Government of India. As per Para 12 of the above said Notification, the unit is entitled to claim as wastage 3% of gold in the case of studded jewellery. The above mentioned Notification does not prescribe any minimum value addition for claiming the wastage. However, Notification No. 177/94 which supercedes the above Notification allows wastage up to 3% for value addition up to 25%. Under the policy, as per Para 147 of Handbook of Procedures, the unit has to obtain a minimum value addition of 15%. The appellant achieved the value addition of 12.75% which is less than 15%. Hence the adjudicating authority did not allow the benefit of any wastage and demanded duty without allowing any wastage. The appellant is aggrieved over the fact that even though they could not achieve full value of addition, the fact remains that they have attained value addition of 12.75%. They prayed that they may be given proportionate allowance of wastage. The Commissioner (Appeals) observed that there is nothing in the policy providing allowance of proportionate wastage. He has upheld the order of the adjudicating authority confirming duty of Rs. 2,92,358/ - being the duty on wastage of 586.999 gms gold. He has also imposed penalty of Rs. 50,000/ - under Section 112 of the Customs Act.

(3.) SHRI M.S. Bhimasena Rao, learned Consultant appeared on behalf of the appellants and Shri Raja Ram, learned JDR appeared on behalf of the Department.