TMI Blog2023 (12) TMI 696X X X X Extracts X X X X X X X X Extracts X X X X ..... Procedure also mandates that the Wastage Norms in respect of the items not covered by the Appendix 41 are to be fixed by the BOA. Para 6.8(e) of the Chapter 6 of the FTP 2004-2009 also states that with respect to the items not covered by the norms notified by the Duty Exemption Scheme, Development Commissioner may fix ad-hoc norms, which would be valid for a period of six months, and within this period, final norms shall be fixed by the BOA. It is apparent that the function and the duty of the BOA is to fix the Wastage Norms. The BOA cannot refuse to exercise this jurisdiction and this power merely because it is of the opinion that the product for which such norms are requested to be determined, would not be commercially viable, or due to the high quantity of wastage, such products should not be allowed in the EOU. The power vested in the BOA is coupled with a duty inasmuch as it is required for giving full effect of EOU Scheme, and without such norms, the Scheme itself would be difficult to implement. It is, therefore, mandatory for the BOA to fix the Wastage Norms, when requested or applied for - In the present case, the Norms Committee refused to determine the Wastage Norms o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner no. 2 being one of the partners. It is claimed that the petitioner no. 1 was a 100% Export Oriented Unit (hereinafter referred to as EOU ) and was granted a Letter of Permission (in short, LOP ) on 16.06.1999 by the Development Commissioner, Noida, Special Economic Zone, Noida, Uttar Pradesh. The said EOU was approved for the manufacture of marble and the downstream products of Marble, being - (a) Marble Slabs and Tiles, (b) Mosaics, (c) Borders, (d) Profiles, (e) Gauged Slate, and (f) other articles made of natural stone. It is claimed that the raw material utilized by petitioner no. 1 is either imported or procured from the domestic market. The said raw material is rough and irregular large sized blocks of marble. The rough marble blocks are sawn into rough marble slabs of the standard thickness of 20mm as per ISI Specification No. IS:1130-1969. The downstream products mentioned above are manufactured from the rough marble slabs of 20mm thickness. The petitioner claims that for putting the marble blocks into the shape and converting them into marble slabs, the marble blocks are sent by the petitioners to some other units on-job work basis after taking proper perm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nomic Zone, that is the respondent no. 3 herein, in March 2004 requesting for fixation of ad hoc Wastage Norms for sawing of marble blocks into marble slabs . Respondent no. 3 vide letter dated 30.08.2004 fixed the ad hoc Wastage Norms for sawing of marble blocks into marble slabs and as per Chapter Note 4 of Chapter 25 of Central Excise Tariff Act, 1985, allowing wastage over and above 30 sq.mtr of marble slab received out of 1 cubic mtr. of marble block of an irregular shape. In terms of the FTP, these are only ad hoc norms and the final Wastage Norms are required to be fixed by the BOA. The Ministry of Commerce referred the matter to the Ministry of Mines, requesting it to fix the percentage of the Wastage Norms for conversion of irregular shaped marble blocks into marble slabs. The Ministry of Mines, in turn, referred the issue to the Indian Bureau of Mines, Nagpur, as it was presumed to have more specialized information on the concerned issue. It is claimed that the Indian Bureau of Mines conducted an extensive study and suggested the Wastage Norms vide its letter dated 16.02.2005, and on the basis of such recommendations, the BOA fixed the Wastage Norms and allowed 31% was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as pleased to dispose of the said Writ Petition by directing as under:- Accordingly, it is directed that the Committee shall deliberate upon the matter and conclude its proceedings on or before 1.10.2012. On conclusion of the proceedings and on coming to a definitive finding as to what should be the wastage norms for downstream products, the said order should be communicated to the Petitioner as well as the Settlement Commission and all other concerned parties. In the interregnum, in order to protect the interest of the Petitioners, the proceedings before the Settlement Commissioner shall remain stayed. With these observations, learned counsel for the Petitioner does not wish to press the writ petition further. The writ petition is disposed of accordingly. List for compliance on 31st October, 2012. Needless to say, the Petitioner shall supply all relevant documents in respect of which notice will be issued to them, by the Respondents. I make it clear that the Committee constituted for fixation of wastage norms of downstream products shall not be impeded by the assertion of the Central Excise that the norms may not be fixed for wastage, as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Industrial Policy and Promotion and Industry body All India Granite and stone Association confirmed this. IV- While M/s Marble Art has the freedom to carry out production activities for items of their choice, Norms Committee does not want to support activities which are not commercially viable or where large amount of wastage is generated. Extending duty free import benefits to such cases would be wasting national resources. V. While the Norms Committee took note of the investigation details provided by the Central Excise (Para 3C above), it has not based its decision on the observations of the Central Excise. Petitioner s submissions 11. The learned counsel for the petitioner submits that the above decision of the Norms Committee is totally flawed inasmuch as it has wrongly presumed that the petitioner would first convert a 20mm thickness slab into a product of 10/12mm thickness and thereafter into the downstream products. He submits that, without prejudice to the above, the Norms Committee cannot refuse to fix the Wastage Norms only on the grounds that the products intended to be manufactured may not be commercially viable. Respondent s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dustrial Policy and Promotion, as also by the Industry Body, that is, the All India Granite and Stone Association. He submits that, therefore, it was decided that while the petitioner has the freedom to carry out production activities for items of their choice, the Norms Committee does not want to support activities which are not commercially viable or where a large amount of wastage is generated. He submits that extending duty free import benefits to such cases would be wasting national resources. He submits that, therefore, the present petition is liable to be dismissed. Analysis and Findings 16. I have considered the submissions made by the learned counsels for the parties. 17. The importance of fixation of the Wastage Norms has been highlighted by the respondents themselves when they state that the nature of the EOU Scheme necessitates the Government to closely monitor the consumption of input and the production process in the EOU Unit, and with this intent, the detailed guideline for determining the ratio of input to its output has been provided. 18. Para 9.30(b) of the Handbook of Procedure also mandates that the Wastage Norms in respect of the items not co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the assertion of the Excise Department. A reading of the Impugned Report of the Norms Committee, however, indicates that even this direction has been flouted, and the Norms Committee has passed its decision based on the input received from the Excise Department. For the said infractions as well, the Impugned Report of the Norms Committee is liable to be set aside. Conclusion and Directions: 24. In view of the above, the Impugned Report of the Norms Committee dated 08.05.2015 is set aside. 25. The Committee shall re-consider and fix the Wastage Norms for the products applied for by the petitioner, in accordance with the law and in accordance with the direction issued by this Court vide its order dated 30.07.2012 passed in WP(C) 464/2011. Such exercise to be completed within a period of eight weeks from the receipt of the copy of this judgment. 26. This judgment shall not, however, in any manner impinge upon the power of the Government of India to, in accordance with law, prohibit the manufacture of any of the items for which the petitioner has applied for fixation of the Wastage Norms. In case any such decision is taken by the Government of India, the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X
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