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TMI Blog2014 (12) TMI 695X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the Handbook of Procedures specifically under paragraph 9.22(b) to the effect the goods/rejects which were cleared from the EOU itself should bear the stamp as 'Rejects' notwithstanding the fact that such stamping as 'Rejects' appeared on the invoice along with distinct marks on the goods and in the absence of any such specific requirement in terms of the said EXIM policy para 9.9? (2) Whether on a plain reading the Tribunal erred in interpreting that the conditions of Notification 13/98-CE dated 2.6.1998 when it went on to hold that the conditions were not satisfied by the appellant in the absence of any specific requirement to that effect in the said Notification and ignoring the fact that the said Notification adopt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equal to duty as re-determined will be payable; (ii) Duty demand of Rs. 2,91,370/- on imported needles is upheld along with interest and penalty; (iii) Rs. 5,24,296/- is along with interest and penalty in respect of local needle, the adjudicating authority is directed to examine as stated above.'' 3. The appellant is a 100% EOU engaged in the manufacture of cotton knitted fabrics falling under sub-heading No.6003.92 of the Central Excise Tariff Act, 1985. On 4.1.2001, the officers of headquarters preventive unit, Coimbatore visited the factory premises of the appellant and conducted verification of physical stock. They found shortage of 1,71,700 of needles that were imported duty free under the Notification No.13/81-Custom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be challenged before the Tribunal contending that the conditions imposed by the Notification No.13/98-CE dated 2.6.98 have been complied with and the demand for duty is erroneous. The finding of the original authority as well as the Tribunal is that the goods were not stamped as rejects and therefore the conditions in the exemption notification were not complied with in respect of the rejects fabric cleared to DTA. When an exemption notification has to be strictly interpreted and the burden of proving eligibility is on the person claiming the same, the Tribunal came to hold that the goods cleared to DTA did not satisfy the requirement of the Notification No.13/98-CE dated 2.6.98 and therefore the conditions of clause (b) of paragraph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her). Reliance was placed on the decision of the Supreme Court in Navin Chemicals Manufacturing and Trading Co.Ltd. v. Collector of Customs, (1993) 68 ELT 3 (SC), wherein the Supreme Court held as follows:- "11. It will be seen that sub-section (5) uses the said expression determination of any question having a relation to the rate of duty or to the value of goods for the purposes of assessment and the Explanation thereto provides a definition of it for the purposes of this sub-section. The Explanation says that the expression includes the determination of a question relating to the rate of duty; to the valuation of goods for purposes of assessment; to the classification of goods under the Tariff and whether or not they are covered by an e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the High Court and whether or not an appeal lies directly to the Supreme Court from a decision of CEGAT: does the question that requires determination have a direct and proximate relation, for the purposes of assessment, to the rate of duty applicable to the goods or to the value of the goods. (emphasis supplied) 7. In fact, the very same view was expressed by the Gujarat High Court in Commissioner of Central Excise v. JBF Industries Ltd., (2011) 264 ELT 162 (Guj.), wherein it is held as under:- "10. In the light of the aforesaid judicial pronouncements, it is apparent that the question as to the applicability of a notification or a circular which has a bearing on the determination of the rate of duty is a question which has a direct a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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