TMI Blog2006 (6) TMI 425X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal arises from Order-in-Original No.73/2003 dated 31-12-2003 by which the Commissioner of Central Excise Customs, Hyderabad after due examination of the entire matter dropped the show cause notice issued to the assessee demanding duty in respect of clearance made by them to the Domestic Tariff Area (DTA) in terms of the permission granted by the Development Commissioner, VEPZ, Visakhapatnam in terms of Paragraph 9.9 (b) of EXIM Policy 1997-2002. The findings recorded by the Commissioner in the impugned order at Paragraphs 22 to 29 are reproduced below :- 22. I have carefully gone through the records of the case, the assessee s reply, their submissions at the time of personal hearing and the relevant case laws. The issue of the demand is anchored on the following wordings of Para 9.24 of Handbook of Procedures 1997-2002. If a unit manufactures and exports several products, bunching of such products for disposal in the DTA may be permitted provided that the total sale effected is within the overall ceiling. DTA sale of an individual item in a bunch shall, however, not exceed the normal percentage entitlement for that item as provided under Paragraph 9.9(b),(c) and (d) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be permitted provided that the total sale effected is within the overall ceiling of the DTA sale permitted . However, as the item of manufacture indicated in the letter of permission as a whole is the Spun Yarn of Cotton/Synthetic of different blends it can be treated as a common single item of manufacture and as such there will be no difference either from the policy angle perhaps from revenue point of view also, if it is allowed as single product for clearance into DTA being spun yarn but within the overall ceiling of DTA sale permitted. The Development Commissioner vide letter No. 8/EOU50/VEPZ/2002. 5799 dated 4-10-2002, addressed to the Commissioner of Customs Central Excise, Hyderabad - III Commissionerate, has clarified M/s. Sanghi Spinners Ltd. s, approved item of manufacture is Spun Yarn Cotton, Synthetic and Blends . Here the Spun Yarn is to be taken as a Broad item of manufacture which is made out of cotton, synthetic blends and each type of spun yarn cannot be differentiated as an independent product for the purpose of DTA sale permission. If the product is other than spun yarn like cotton fabric etc. which is also one of the permitted product of EOU under Broa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -Cus., dated 28-11-95 (issued from F. No. 305/113/94-FTT) have directed On issues like non-fulfilment of export obligations, action has to be initiated in consultation with the Development Commissioner or the Commerce Ministry. ............ this would avoid situations wherein the allegations in the notices might be found unsustainable in terms of EXIM Policy/Customs law and may have to be dropped by the Department itself . 26. The following case laws have reiterated the above clarifications of the CBEC: Import and export policy - Adjudicating authority is bound by clarifications and detailed opinion of competent authority like DGFT and GCI E -Kitply Industries Ltd. v Commr. of Cus., New Kandla - 2001 (130) E.L.T. 236 (Tri. - Kolkata). Demand - 100% EOU - No intimation given to Development Commissioner prior to Adjudication in compliance of Circular No. 21/95 - Cus., dated 10-3-95 and 122/95 dated 28-11-95 - No evidence relied as regards the sales effected in DTA -Demand under Section 3(1) of the Central Excise Act, 1944, not sustainable . - 2001 (132) E.L.T. 214 (Tri. - Bang) - Kuntal Granites v. Commr. of Central Excise, Bangalore. Matter against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he wordings An EOU/EPZ/EHTP unit may bunch the product manufactured by it for the purpose of DTA sale within the six digit HS Code have been deleted from Para 9.24 of the EXIM Policy 1997-2002 with effect from April 1998 which clearly shows that the intentions of the Ministry of Commerce of the Govt. of India, is not favouring bunching of products within the HS Code. 28. However, as discussed in para 21 above, the Development Commissioner s Office has differed from the interpretation of this Department, contending that the product approved by them and cleared by the assessees is a single item Spun Yarn Cotton, Synthetic and Blends , and have also approved their clearances as correct. The CBEC Circulars dated 10-3-95 and 28-11-95 direct that the Development Commissioner s opinion/contentions are to be sought before confirming demands based on the EXIM Policy. The Tribunals vide various judgments as mentioned in para 24 above have also reiterated the same. The Ministry of Commerce, Govt, of India, have done away with the policy of bunching of products within the six digit HS code, with effect from April 1998. In view of this I hold that the demand raised under sub-section (1) of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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