At, Customs Excise Service Tax Appellate Tribunal South Zonal Bench At Chennai
By, THE HONORABLE JUSTICE: D.N. PANDA
By, MEMBER AND THE HONORABLE JUSTICE: MADHU MOHAN DAMODHAR
For Petitioner: C. Saravanan, Advocate And For Respondents: S. Nagalingam, AC (AR)
1. Appellant says that the raw material imported by it during the period October, 1999 to March, 2002 have undergone the process of manufacture. The resultant goods have been exported in fulfillment of the condition of Notification No. 53/97-Cus., dated 3-6-1997 and appropriate quantum of foreign exchange have been realized. There is no violation made to the Export Import Policy in this regard. The only difficulty arose for the department is that the percentage of the wastage occurred in the manufacturing process to the extent 25.93 for the period from October, 1999 to March, 2011 and 28.70% for the period from April, 2001 to March, 2002 was not acceptable to Revenue. But there was no SION (Standard Input Output Norm) prescribed by the policy which governed the appellant. Therefore, Circular No. 305/111/85-FTD, dated 29-12-1986 relied by Revenue to restrict the wastage to 25% is of no avail to the department to realize the duty alleged to have been forgone on the waste material. Appellant further says that whatever the waste has occurred that has also fetched excise duty to the department without any allegation of finding of clandestine removal. In such circumstances, appellant's prayer is to allow the appeal without any Customs duty being levied on the waste. Revenue says that the SION norm against wastage was 25% of the input. That being fixed by the Board in terms of the aforesaid circular, the quantum of waste generated should not exceed 25%. The excess quantum shall be liable to Customs duty which was in violation of Notification No. 53/97-Cus., dated 3-6-1997.
2. Heard both sides and perused the records.
3. Prima facie, it does not appeal to common sense as to how without SION fixed by the EXTM Policy which governed the appellant for the purpose of import and export and also the notification governing the appellant, as aforesaid, having no mention about any SION or percentage of wastage, appellant shall be arbitrarily dealt. Making further examination, it is noticed that the waste generated was not deliberate and the appellant has paid excise duty thereon when cleared. Department has not made any case to show that there was deliberate pilferage of the raw material by the appellant or diver
Please Login To View The Full Judgment!
ted the same. In absence of any mala fide being brought on to record, appellant cannot be suspected to have made any undue gain at the cost of the State. Therefore, arbitrary adjudication is not permissible. Accordingly, appeal is allowed.