TaxTMI 
TaxTMI 
2024 (3) TMI 995
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....rtment that the Appellants have not regulated their operations based on the norms as fixed by norms committee available for the consumption of inputs and thereby violated the conditions laid down under the Notification No. 0.52/2003 - Cu , dated 31.03.2003. While alleging violation of input output norms department has taken quantum of clearance of finished goods from ER2 returns and compared with imported inputs by applying the ratio as per norms committee. After applying the said ratio, in case, excess imported scrap is used, customs duty has been demanded on said excess imported utilized scrap under Section 72 read with Section 28 of customs Act. 3. Appellants made the following submissions: 3.1 The Notification 52/2003-CUS dated 31.03.2003 was amended on 06.07.2007 to limit the generation of waste up to 2% of the input quantity where no SION is notified. It is submitted that the Appellant had imported the quantity shown as opening balance i.e. 492.26 M.T. of brass scrap prior to 06.07.2007. The said condition shall not apply on the same as the amendment is applicable from the date of issue and does not have a retrospective effect. Therefore, the stock lying in balance out of i....
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....ante clause is a legislative device which is employed to give overriding effect to certain provisions over some contrary provision that may be found in the enactment. 3.4 Thus, it was submitted that there is no dispute that waste is cleared in DTA on payment of applicable duty of customs with permission of Development Commissioner. Thus, demand of customs duty on imported inputs is not sustainable. The present-issue is covered in favour of appellants by decision in case of Meridian Impex Vs. CCE & ST, 2018 (7) TMI 865-CESTAT as confirmed by Hon'ble High court of Gujarat in case of Commissioner of Customs (Preventive) Vs. Monarch Overseas, 2019 (1) TMI 1513- Gujarat High Court, 4. The present case is entirely covered by the case of Meridian Impex Vs. CCE & ST, 2018 (7) TMI 865-CESTAT, wherein it is held that after segregation of the mixed imported scrap, the segregated scrap, if cleared, cannot be considered as clearance of the 'inputs as such. The relevant para of the judgment is produced below, "13. On the issue of payment of duty on the excess use/consumption scrap material. in the activity of segregation/manufacture of finished goods, then the norms fixed by the norm....
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....ion Notification No. 53/ 2003-Cus, dated 31/03/2003 cannot be denied. In the present case, the scrap generated during the course of segregation/manufacture of brass articles had been permitted to be cleared in the DTA by the Development Commissioner and the Appellant-assessee had cleared the scrap pursuant to the said permission and discharged appropriate excise duty on its sale. Hence, demanding customs duty foregone on the excess quantity of imported scrap worked out on the basis of the Norms fixed by the Committee, in our view, is not sustainable in law. We summarize our findings as follows: (i) The activity of Segregation of imported mixed brass scrap into foundry and non- foundry grade, results into manufacture, hence, the Revenue's Appeals on this count fails, accordingly, rejected (ii) The excess quantity of scrap generated during the activity of segregation/manufacture of the Brass articles cleared on payment of applicable excise duty in DTA as per the permission of Development commissioner, is covered by clause (3) of the Exemption Notification 50/2003cus. Dr. 31.3.2003, as amended. and the respective Orders of the Id. Commissioner(Appeals) which are passed on sa....
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....in fact been cleared on payment of duty after being duly permitted by the Development Commissioner in accordance with the provisions of the EXIM Policy. The requirements of clause (3) of Notification [No.] 52/2003-Cus., dated 31st March, 2003 are therefore, wholly satisfied. Under the circumstances, there does not appear to be any legal infirmity in the view adopted by the Tribunal." 6. It was submitted that Chapter 6 of the Foreign Trade Policy (hereinafter referred to as "FTP") nowhere mentions that for the excess generation of waste and scrap, duty equivalent to the duty on proportionate quantity of imported raw material is required to be paid. Chapter 6 of the FTP provides that there should be no duty demand even in case where the waste or scrap is destroyed in EOU. Further, it is also stated that the byproducts included in the LOP can be sold in DTA with the permission of the Deputy Commissioner on the payment of applicable duties. The relevant part of the FTP is produced for the ease of reference: "Para 6.8 (e), (f) and (g) of the FTP read as under: (e) Scrap/waste/ remnants arising out of production process or in connection therewith may be sold in DTA, as per SION no....