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Issues:
Appeal against order-in-appeal confirming customs duty, redemption fine, and penalty - Violation of Tribunal's remand order - Interpretation of Board's Circular dated 6-8-1997 - Non-fulfilment of export obligation by 100% EOU - Approval requirement from Development Commissioner or Board of approval for claiming customs duty. Analysis: The appeal was directed against the order-in-appeal affirming the customs duty, redemption fine, and penalty imposed by the Joint Commissioner, which was confirmed by the Commissioner (Appeals). The appellants argued that the Commissioner (Appeals) did not follow the Tribunal's direction in the remand order to decide the matter on merits and in accordance with the principles of law and natural justice, citing the case of Vishal Footwear Ltd. v. CCE, New Delhi. The impugned order was challenged on the grounds that the Commissioner (Appeals) erred in considering the Board's Circular dated 6-8-1997 as binding, despite acknowledging that following the law laid down in the Vishal Footwear case would render the customs duty confirmation unsustainable. The adjudicating authority had confirmed the customs duty against the appellants for failing to meet the export obligation. The appellants contended that without seeking necessary permission from the Development Commissioner or Board of approval regarding the non-fulfilment of the export obligation as per the Finance Ministry's Circular, the demand could not be upheld. The Tribunal had previously set aside the Commissioner (Appeals)'s order and remanded the matter with directions to decide on merits following natural justice and considering the Vishal Footwear case law. In the Vishal Footwear case, it was established that for a 100% Export Oriented Unit (EOU), customs duty for non-fulfilment of export obligation can only be claimed after approval from the Development Commissioner or Board of approval. The impugned order acknowledged that following the Vishal Footwear case law, the customs duty confirmation against the appellants could not be sustained. The Circular dated 6-8-1997, which stated no prior approval was needed for claiming customs duty from a 100% EOU, was deemed ineffective in overriding the Vishal Footwear case judgment based on the Ministry of Finance Circular dated 10-3-1995. Therefore, the Commissioner (Appeals)'s order confirming the customs duty was set aside, allowing the appeal. The Department was directed to seek necessary approval from the Development Commissioner as per the Finance Ministry's Circular and the Tribunal's judgment in the Vishal Footwear case before initiating recovery proceedings against the appellants.
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