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2016 (6) TMI 71 - CESTAT NEW DELHI

2016 (6) TMI 71 - CESTAT NEW DELHI - 2016 (343) E.L.T. 940 (Tri. - Del.) - Whether the permission granted by the Development Commissioner allowed DTA clearances of Synthetic Yarn - Demand of duty - Clearance of Polyester Synthetic Yarn in the DTA on payment of duty - Notification No. 8/97-CE dated 01.03.1997 as amended on the basis of DTA clearance permission granted by the Development Commissioner on 15.04.2002 - Held that:- the only harmonious interpretation of the scope of condition 1 of the .....

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the DGFT's Permission letter does not disallow domestic clearances of synthetic yarn granted by the Development Commissioner in the opening paragraph of the said permission letter. Indeed, this interpretation is in conformity with para 6.8 (c) & (d) of the Hand Book Procedure 2002/2007. - As is evident that, the entitlement for domestic clearances is determined in totality and not with reference to specific items. The contention of the Ld. DR that Synthetic Yarn and Cotton Yarn do not belong .....

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n turn renders the Revenue’s appeal also infructuous. Accordingly, the impugned orders are set aside. - Decided in favour of assessee - Excise Appeal No. E/2640-2641 & 2693/2006-Ex[DB] - Final Order No. 51702-51704/2016 - Dated:- 28-4-2016 - MR. S.K. MOHANTY, MEMBER (JUDICIAL) AND MR. R. K. SINGH, MEMBER (TECHNICAL) For the Petitioner : Mr. B. L. Narsimhan (Advocate) For the Respondent : Mr. Govind Dixit DR ORDER PER R. K. SINGH: The appellant assesse and Shri B. K. Sharma General Manager of the .....

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ed to ₹ 8,07,227/- imposed by the primary adjudicating authority. The demand has been confirmed on the ground that the appellant had cleared Polyster Synthetic Yarn in the DTA on payment of duty in terms of Notification No. 8/97-CE dated 01.03.1997 as amended on the basis of DTA clearance permission granted by the Development Commissioner on 15.04.2002 which was subject to the condition that the DTA sale will be of similar goods or goods belonging to same class as that of goods manufacture .....

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rt subject to fulfillment of minimum NFEP. * As per para 6.8 (c) & (d) of the Exim Hand Book of Procedure 2002/2007, DTA sale was permissible for similar goods or goods belonging to same class and the entitlement is to be determined in totality and not with reference to specific items. * In its application for permission for DTA clearance submitted to DGFT on 10.04.2002 it had clearly stated that during the quarter January to March, 2002 it had only exported Cotton Yarn and the Development C .....

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mission to be valid for both these types of yarn. * The appellant assessee being 100% EOU, the goods were allowed to be cleared by the Central Excise authorities on the basis of the DGFT permission. 3. The Ld. DR, on the other hand, stated that (i) Cotton Yarn and Synthetic Yarn are neither similar goods nor they belong to the same class of goods because one is obtained from natural fiber while the other is obtained from the artificial fiber. (ii) When no synthetic yarn was exported during the p .....

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sale of goods in domestic tariff area by EOUs, SEZ on a quarterly basis and during the quarter January - March 2002 no Synthetic Yarn was exported and therefore DTA clearance of synthetic yarn was not as per the Exim Policy. 4. We have considered the contentions from both sides and perused the records. 5. The appellant had cleared Synthetic Yarn in the domestic tariff area in terms of Notification No. 8/97-CE as amended which allowed such clearances on payment of duty equal to the excise duty p .....

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ia. The only dispute in the present appeals is whether the permission granted by the Development Commissioner allowed DTA clearances of Synthetic Yarn. In this regard it is useful to reproduce the permission dated 15.04.2002 of the Development Commissioner. The above permission was granted by the DGFT on the appellants application dated 9.4.2002. We have perused the said application which was submitted during the hearing and find that in the said application the appellant had categorically ment .....

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d in Appendix-II of the Policy on payment of applicable duties. Sales made to a private bonded warehouse set up under paragraph 2.39 of the policy shall also be taken into account for the purpose of arriving at FOB value of exports by EOU/EPZ units provided payment for such sales are made from EEFC account. No DTA sale shall be permissible in respect of motor cars, alcoholic liquors, tea (except instant tea) and books or by a packaging/ labeling/ segregation/ refrigeration unit and such other it .....

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area. We find that the aforesaid permission conveyed the approval of the Development Commissioner for sale of both Cotton Yarn and Synthetic Yarn up to the value of ₹ 2,37,62,612/-. While granting the said permission, the Development Commissioner was fully aware that during the quarter January to March 2002, there were no exports of Synthetic Yarn. Condition No. 1 of the said permission states that DTA sale will be permissible only to the similar goods or which belong to the same class as .....

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Yarn during that quarter. Therefore, the only harmonious interpretation of the scope of the said condition is that the clearances in the DTA for Cotton Yarn and Synthetic Yarn is subject to the condition that similar goods i.e. goods namely Cotton Yarn and Synthetic Yarn should have been manufactured and exported from the unit in the past. It is not disputed and indeed it is demonstrated by the various AR-4 application copies submitted by the appellant that the unit had exported both Cotton Yarn .....

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