TMI Blog2023 (6) TMI 658X X X X Extracts X X X X X X X X Extracts X X X X ..... , as held in re Flex Engineering Ltd, is not a product that will be accepted by the customer and, therefore, undeniably rendering the raw materials used for test production as consumables eligible for exemption. The output of test of manufactured capital goods is distinguishable from test run of installed machinery which precedes actual commercial production and it would appear that the jurisdictional authorities were unable to appreciate the distinction which shifts an input from raw material to consumables for the purposes of the impugned notification. The clubbing of all of these as inputs for the purpose of accountal of eligible quantities of each does not exclude any type of goods used in production and the jurisdictiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER PER : C J MATHEW By this common order, we dispose off two appeals filed by M/s ASB International against confirmation of demand [order-in-original no. 11/ANS-11/ASB INTERNATIONAL/TH-I/2012 dated 27.12.2012] of ₹ 68,75,451 and demand [order-in-original no. 12/ANS-12/ASB INTERNATIONAL/TH-I/2012 dated 27.12. 2012] of ₹ 3,88,600 under section 28 of Customs Act, 1962, along with interest thereon under section 28AA of Customs Act, 1962, and imposition of penalties of like amount under section 114A of Customs Act, 1962 for the period from 13th April 2005 to 5th June 2009 and from 5th August 2009 to 5th February 2010 in orders of Commissioner of Central Excise, Thane-I. The appellant had been issued with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding to the designs furnished by their customers and are despatched to them only after ascertaining adherence to the standards and the design. The produce of the test is to be mutilated solely for the reason that it cannot be marketed by them and, thereafter, sold as scarp on payment of applicable duties of customs. The case of the appellant, according to Learned Consultant, is that the polyethylene (PET) granules are, undeniably, inputs necessary for marketability of moulds exported by them. 4. He submitted that the adjudicating authority has erroneously concluded that the polyethylene (PET) granules not being deployed in the finished goods that are exported but in goods that were never intended to be exported would not fall wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the goods for the purpose of admissibility of exemption. He submitted that it was not within the competence of customs authorities to deny exemption on goods that the Development Commissioner had deemed to be essential for production of goods in fulfilment of export obligation. It was also pointed out by him that, for the period between March 2010 and March 2013, the appellant was proceeded against for ineligibility to avail CENVAT credit from lack of conformity of polyethylene (PET) granules , on which duty liability had been discharged, with definition of inputs when used for testing, as in the impugned duty, and, on clear finding of nexus with manufacture of moulds , the same jurisdictional Commissioner of Central Excise [order- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 52/2003-Cus dated 31st March 2003. The said exemption operationalizes the intent of Government of India in formulation of the design of the export oriented scheme (EOU) of the Foreign Trade Policy (FTP). The policy does not distinguish any category of goods in the conceptual framework but allows all types of goods in paragraph 6.2(b) and even the Handbook of Procedures (HoP), in paragraph 6.5.1, has clubbed raw materials, components, consumables, intermediates, spares and packing materials as one distinct category for the purposes of exemption implying, thereby, that these are all inputs in the manufacturing process. The definition of consumables in paragraph 9.15 of the Foreign Trade Policy (FTP) is broad enough to cover goods tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... included in the price contracted by the appellant with its customers. There is no factual evidence to substantiate any compromise of the export oriented unit (EOU) scheme on this count. 11. That the polyethylene (PET) granules deployed in production of goods in trial run of moulds manufactured by the appellant have been considered as inputs for manufacture between March 2010 and March 2013 for the purposes of CENVAT Credit Rules, 2004. These are, thereby, procured for manufacture of output and it is not open for Revenue to adopt a contrary stand merely for denial of exemption on procurement under a scheme of the Foreign Trade Policy (FTP). 12. Considering that polyethylene (PET) granules are used during the manufacture of mo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
