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Forza Medi India Private Ltd. Versus CCE, Delhi

2017 (9) TMI 1018 - CESTAT CHANDIGARH

100% EOU - Scrap - SION - generation of scrap at abnormally high levels - undervaluation of scrap - interpretation - Held that: - It is clear from the decision of the committee that it decided to ratify the norms for the items manufactured by the assessee. It is also noted in said letter that the norms were also supported by actual consumption/scrap data - expression Ratification means the making valid of an act already done. - DGFT has retrospective validated higher norms for the appellant. .....

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d Unit having Customs bonded warehouse and Central Excise registration for the manufacture of Wheel Chair & Components falling under Chapter Sub-heading No. 87131010 & 87142020 of Central Excise Tariff. The noticee is importing duty free Aluminum Sections/Tubes in terms of Notification No. 52/2003-Cus dt. 31.03.2003 and procuring duty free inputs i.e. M.S. Tubes indigenously in terms of Notification No. 22/2003-C.Ex dt. 31.03.2003-C.Ex dt. 31.03.2003 for manufacture of Wheel Chair and it .....

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as per SION, generation of waste & scrap is not permitted. In this cae, whatever quantity of Alumini scrap & MS scrap has been generated, is required to be cleared on payment of amount of duty foregone at the time of procurement of the duty free raw material i.e. Aluminium Sections/ tubes and MS tubes. The Noticee had however shown generation and sale of Aluminium Scrap and MS Scap on payment of duty (i.e. duty foregone) in monthly ER-2 return but had not paid correct amount of duty forg .....

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aring the value of the scrapt cleared during the period May, 2009 to November, 2013. (b) Similarly, the appellant had made short payment of duty (i.e. duty foregone) amounting to ₹ 10,30,790/- on sale of scrap arisen out of M.S. Tubes procured duty free in terms of Notification No. 22/2003-CE dt. 31.03.2013 by mis-declaring the value of the scrap cleared during the period May, 2009 to November, 2013. Revenue felt that in the case where generation of scrap is more than that permitted in SIO .....

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dicated resulting in confirmation of the demand of ₹ 1,34,64,782/- under Customs Act and ₹ 13,19,552/- under the Central Excise Act along with appropriate interest and imposition of equivalent amount of penalties under the respective acts. Aggrieved from the same, the appellants have filed this appeal. 3. Ld. Advocate submits that the waste input output norms for their export products had been fixed with retrospective effect by the DGFT in their case in its meeting held on 17.03.2015 .....

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wherein the Hon ble Court has held that expression Ratification means the making valid of an act already done . He also relied on the judgment of Larger Bench of the Supreme Court in the case of Maharashtra State Mining vs. Sunil S/o Pundikaro Pathak (2006) 5 SCC 96. Further, in the same judgment, the Hon ble Court had held that in the case of Hartman Vs. Honsby (142 MO 368, 44 SW 242, 244) ratification was succinctly define by the English Court. He contended that due to mis-interpretation of wo .....

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following findings in para 18 of her order:- 18. I observe that in the instant case contention of Department is where no SION has been notified, the generation of waste, scrap and remnants up to 2% of input quantity shall be allowed on self-declared norms and in cases where generation of scrap is more than 2%, as per norms fixed by Development Commissioner shall be allowed. Since in the instant case generation of scrap was more than 2% such norms were required to be notified by the Development C .....

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thly ER-2 return but had not paid correct amount of duty foregone in as much as the value (per Kg) of scrap taken for payment of amount of duty foregone was found to be much lower than the value of equal quantity of value of inputs procured duty free. Further, in para 23 she has rejected the letter dt. 16.04.2015 of the DGFT which the appellant had submitted before her on the ground that it was not stated specifically in the said letter that the impugned norms have been fixed by said office with .....

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