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2015 (12) TMI 1485 - AT - Customs100% EOU - procurement of goods without payment of duty - The goods were received in the appellants factory and at the time of weigment while re-warehousing found to be short - penalty under Section 114A - Held that:- there is no allegation either in the show cause notice or in the order of the first appellate authority that there was any diversion of the goods after their import duty free. The number of bales received in the factory were the same as shown in the Bill of Entry and they were found to be intact and unopened at the time of re-warehousing in the factory which was done in the presence of the custom officer. Cotton is a kind of raw material which can vary in weight marginally depending upon its moisture content. Possibly for that reason only CBEC vide the circular dated 15.4.1983 stated that loss in weight up to 1% was condonable, although it gave no scientific basis as to how the figure of 1% was arrived at. Further, there is nothing sacrosanct about the figure of 1% mentioned in the said letter CBEC. The entire quantity of bales of cotton imported was received in the factory intact and there is neither any allegation of diversion nor any evidence to that effect. Even the supplier reimbursed the amount towards shortage noticed in weight which also supports the view that there was no diversion of the duty free goods. Thus none of the conditions of the exemption Notification No. 53/1977-Cus. are violated. In these circumstances the impugned demand is totally unsustainable and is therefore set aside - Decided in favour of assessee.
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