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TMI Blog2017 (7) TMI 438X X X X Extracts X X X X X X X X Extracts X X X X ..... r Chapter sub-heading No.56012110 of the First Schedule to the Central Excise Tariff Act, 1985. They imported 100% Cotton Comber Noil falling under Chapter 52.02 of the Customs Tariff Act, 1975 without payment of Customs Duty against CT-3 which was further used in the manufacture of Absorbent Cotton. During the course of such manufacture, cotton waste was generated. Show cause notice was issued wherein it was contended that as per the Handbook of Procedure, as per the input of norms upper limit for the cotton waste generation during the course of manufacture was 5% i.e. 1.05Kg of raw cotton input, manufacturer was to produce 1Kg. of Absorbent Cotton output. It was observed that during the period from June 2001 to March 2006, the assessee co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd notification No.52/2003-Cus. dt. 31.3.2003 and used the same in the manufacture of 1,33,62,763Kgs. of Absorbent Cotton whereas the total consumption quantity of imported Comber Noil is only 8998,500 kgs. and the balance 71,91,567 kgs. consumption of indigenous raw cotton during the said period. In this regard the appellant submitted a letter dt. 1.6.2006 along with relevant data but the Commissioner wrongly taken the entire quantity as imported. The Ld. Commissioner has erred in relying upon the para 9.30 of Handbook Procedures in the manner in which it was worded in the year 1999-2000 and not in the manner it was worded for each of the years during the relevant period to the show cause notice and similarly relied upon the wordings in pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specific permission of the Development Commissioner. The only condition in respect of sale in DTA is that it should be within the overall ceiling of 50% of FOB value of exports. He submits that the Commissioner wrongly added the words to para (e) of Appendix 42 of the Handbook for the years 2001-2002. The above para (e) of Appendix-42 only states that an application for sale of scrap. The Commissioner erred in denying the exemption Notification No.23/03-CE dt. 31.3.2002 on the ground that the same is available only if the appellant obtaines permission to clear cotton wastes/droppings from the Development Commissioner in accordance with Appendix 14F of the Handbook of Procedures for the year 2002-2007. Appendix 14F(e) of the Handbook only ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2006 in respect of the similar issue in the case of the appellant has held that prior to 5.1.2004 when the CBEC Circular was issued that the duty demand would be recovered under the main Section 3(1) of the Central Excise Act, 1944 and not in terms of the proviso thereto. In this fact the Commissioner should have excluded the period of demand i.e. from June 2001 to March 2003 in respect of cotton wastes/droppings as the above period was covered by the notice being adjudicated by the Additional Commissioner of Central Excise. However, the Commissioner has gravely erred in confirming the demand on the basis of mere theoretical difference between raw material consumed and production and not on the basis of cotton wastes/droppings cleared by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es the findings of the impugned order. He submits that removal of cotton wastes and droppings without obtaining the permission of Development Commissioner the appellant is not entitled for the exemption of the notification as the permission of the Development Commissioner is the vital condition and for violation of the condition of the notification, the exemption cannot be extended to the appellant. 4. We have carefully considered the submissions made by both the sides before going to the merit of the case, we find that as per the submission of the Ld. Counsel and the finding of the impugned order. There are grave inconsistencies on the vital fact, such as the Ld. Commissioner has not considered the raw material imported and indigenously p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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