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2024 (3) TMI 995 - AT - Customs100% EOU - Denial of benefit of exemption under Notification No. 52/2003-Cus - violation of input output norms - excess generation of waste and scrap - HELD THAT:- The present case is entirely covered by the case of Meridian Impex Vs. CCE & ST,[2018 (7) TMI 865 - CESTAT AHMEDABAD], wherein it is held that after segregation of the mixed imported scrap, the segregated scrap, if cleared, cannot be considered as clearance of the 'inputs as such. The same has been affirmed by the Gujarat High Court in the decision of Commissioner of Customs (Preventive) Vs. Monarch Overseas,[2019 (1) TMI 1513 - GUJARAT HIGH COURT]. It was submitted that Chapter 6 of the Foreign Trade Policy ("FTP") nowhere mentions that for the excess generation of waste and scrap, duty equivalent to the duty on proportionate quantity of imported raw material is required to be paid. Chapter 6 of the FTP provides that there should be no duty demand even in case where the waste or scrap is destroyed in EOU. Further, it is also stated that the byproducts included in the LOP can be sold in DTA with the permission of the Deputy Commissioner on the payment of applicable duties. Thus, nowhere it was mentioned that duty amount on proportionate raw materials is to be paid in case, there is excess clearance of waste and scrap and therefore the same cannot be demanded. Further, the only restriction on the excess clearance of the waste and scrap is that the same can be cleared on the payment of full duty which the appellants have already paid. Moreover, as per Chapter 10 of the CBEC's Custom Manual of instruction issued on 11.09.2001 duty on bonded goods can only be demanded in certain specified circumstances. Therefore, the appeal is allowed with consequential relief. Appeal allowed.
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