TMI Blog2020 (6) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... the case is also an EOU, who are otherwise entitled to procure goods by import or on CE-3 certificates as per the provisions of FTP. We find that the provisions of the FTP and the Customs Notification are required to be read in harmony. It is not the case of the department that the imported or domestically procured goods are diverted into open market. The department agrees to the fact that the appellants have transferred the impugned goods to their sister EOU unit in Venkatapur. There is no allegation or proof that the same has been diverted by either of the EOUs. The appellants have submitted a Chartered Accountant certificate correlating transfer and receipt of the goods. They have also made good the duty for deficient items along with in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and perused the records of the case. The appellants M/s. Global Green Company Limited are an EOU engaged in in-bond processing and manufacture of agricultural commodities. They have two units. One at Anugondanahalli Hobli Bangalore and one at Venkatapua, Andhra Pradesh. Officers of Central Excise, Bangalore have visited the premises of the appellants and have found that the appellants had committed various offences in relation to procurement of raw materials, clearance in DTA, etc., and evaded duty as follows: (i) ₹ 83,67,399/- on the imported inputs removed or diverted in contravention of Notifications 53/97 dated 3.6.1997 and 52/2003 dated 31.3.2003; (ii) An amount of ₹ 47,54,781/- on indigenous inputs proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Customs Notifications 53/97 dated 3.6.1997 and 52/2003 dated 31.3.2003. Under such circumstances, demand of duty from their Bangalore unit does not arise. Commissioner has erroneously found that after the deletion of the provisions relating to inter-unit transfer of the raw materials, goods cannot be transferred from one EOU to the other. It is not the case of the department that the goods were diverted into the local market and have not been utilized for the designated purpose of their sister unit at Venkatapur in terms of the permission granted by the Development Commissioner. He submits that CESTAT has decided an identical case in Sunil Kumar Jain and Ors. vs. CCE reported in 2008 (85) RLT 105 (CESTAT-Mum.) holding that there can b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey had imported unlabeled processed jams in bulk and they have undertaken repacking and labeling before clearing the same into DTA or export. The jams were packed in cardboard cartons for wholesale / retail sale. He submits that in view of the Chapter Note 7 to Chapter 20 of the Tariff, the activities undertaken by the appellants would amount to manufacture. This was held so by the Supreme Court in the case of M/s. BOC (I) Ltd.: 2008(226) ELT 323 (SC). Further, Circular No.314/30/97-CE dated 6.5.1997 has explained the position regarding the liberal interpretation of the word manufacture . The Circular was held in the following cases: CC Vs. Weston Electronics reported in 2000 (116) ELT 181. Hewlett Packard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to manufacture. We find that in all the three counts, the arguments of the learned counsel for the appellant are sustainable. On the first issue, the contention of the Department was that after 2003, the raw materials cannot be transferred in terms of the Customs Notification, however, we find as demonstrated by the learned counsel that the recipient in the case is also an EOU, who are otherwise entitled to procure goods by import or on CE-3 certificates as per the provisions of FTP. We find that the provisions of the FTP and the Customs Notification are required to be read in harmony. It is not the case of the department that the imported or domestically procured goods are diverted into open market. The department agrees to the fact that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar No.314/30/97-CE dated6.5.1997 clarifies as under: 5. Hence, it is clarified that a broader view is called for in respect of the interpretation of the provisions of Notification No. 1/95-C.E. and the exemption may not be restricted only to cases where manufacture‟ under section 2(f) of Central Excise Act is involved. It is clarified that the exemption under Notification No. 1/95- C.E. will also be applicable to a 100% EOU engaged in galvanising‟ of black MS pipes. This issues with the approval of the Board. The view taken by Tribunal in the case of Western Electronics: 2000 (116) ELT 181 and BOC (I) Ltd. (supra) in favour of the appellants. 10. Regarding the other issues relied upon by the app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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