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TMI Blog2012 (7) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... rt-import policy in force. They were required to achieve minimum 20% net foreign exchange as percentage of export during the relevant period. They obtained permission from Development Commissioner, KASEZ for clearance of 25% of their production into domestic tariff area subject to the condition that same will be adjusted against their future entitlements and also that if the appellant failed to fulfil this requirement action would be initiated against them to enforce the undertaking/declaration given by them in this regard vide points dated 23.2.98 and 6.4.98. Lower authorities directed the appellant to produce the statement showing the calculated of value addition, in accordance with the provisions of para 9.29 of the policy on noticing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Development Commissioner who can initiate proceedings against the appellant. It is his submission that no proceedings have been initiated against the appellant by the Development Commissioner even after completion of five years. He would submit that various benches of the Tribunal have held categorically that only when Development Commissioner arrives at clear finding that there has been a shortfall in fulfilment of export obligation, demands can be confirmed by the Customs Authorities and demands if any raised and confirmed in absence of any such findings by the Development Commissioner are pre-matured and liable to be set aside. He relies on the following case laws: 1. Vishal Footwear Ltd. Vs. Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this case. Ld. departmental representative on the other hand would reiterate the findings of both the lower authorities. 6. We have considered the submissions made by both sides and perused the records. 7. On perusal of the records, we find that the issue involved in this case is regarding the demand of the duty liability on the goods cleared to DTA by the appellant by denying him the concessional duty under Notification No.02/95-CE dated 4.1.95 for not achieving NFEP as has been undertaken by them. 8. It is undisputed in this case that the appellant is a 100% EOU and as per para 9.29 of the policy, NFEP has to be calculated in accordance with the policy. It is also undisputed that the Development Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n from the above reproduced para of Export-Import policy that the said policy talks about calculation of NFEP annually and cumulatively for a period of five years from the commencement of commercial production based upon the formula. In the case in hand, it is undisputed that five years have not been completed after the start of commercial production by the appellant. We find that in the case of Vishal Footwear Ltd. (supra) this bench has considered the issue in detail and with respect we may reproduce the ratio of the said decision. 6. We have? carefully considered the rival submissions and we see great force in the submissions of the appellants. Extract from the Ministry of Finance Circular is reproduced below : Issue of show cause noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e conditions of the exemption notification has been violated. At this stage, it will be open for this Department to issue a show cause notice to the unit for demanding the due duty on the imported goods. Normally the customs authorities should immediately inform the Development Commissioner in case a 100% EOU ceases production prematurely or fails to commence production or export within the stipulated period. In case the Development Commissioner initiates action against the unit for non-fulfillment of export obligation etc. simultaneously, the customs authorities should issue show cause notice for failure to comply with conditions of Notification 13/81-Cus., dated 9-2-1981. The demand of duty should be confirmed only after a definite concl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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