ORDER
C.N.B. Nair, Member (T)
1. The appellant imported woollen fabrics under Duty Exemption Scheme. The appellant sought permission of the Assistant Commissioner, Central Excise, Amritsar to send the said woollen fabric to M/s. Givo Ltd., Gurgaon for conversion of the fabrics into suits for export. The said M/s. Givo Ltd. is also registered with Central Excise. The permission was granted vide letter dated 21-12-98 subject to execution of Bond for safeguarding duty. The appellant exported part of the suits manufactured after bringing back them to its factory at Amritsar and exported the remaining (7226 suits) directly from the job worker’s premises through Delhi Airport. In the impugned order, the duty demand of over Rs. 18 lakhs has been confirmed with penalty. The duty amount is equivalent to the duty payable on the fabrics used in the 7226 suits which were directly exported from the job worker’s premises. The ground for duty demand is that the appellant was required to bring the suits to its factory and thereafter, export them under AR-4 procedure. Commissioner (Appeals) has also held that evidence of export submitted by the assessee is “totally unreliable”.
2. The submission of the appellant all through was that the manufactured suits,were exported from Delhi Airport and the export remains evidenced by the relevant shipping bills. It is also being pointed out that the suits under export remain correlated with the imported fabrics by way of quantity and other particulars. During the hearing of the case, the learned Counsel took us through the evidence in detail and submitted that the duty demand is entirely unjustified inasmuch as the shipping documents specifically mentioned the DEEC book and import licence. It is also submitted that Customs authorities had verified and accepted the export under DEEC scheme. The contention of the learned Counsel is that the duty demand is untenable in the face of acceptance of the export under DEEC scheme and that in the facts of the case, the Commissioner’s (Appeals) finding that the correlation is ‘totally unreliable’, is not sustainable.
3. The learned SDR has submitted that the impugned order is justified inasmuch as the appellant had not followed the procedure for bringing the goods to its own factory and exporting under AR-4 procedure.
4. The obligation of the appellant under the duty exemption scheme was to export the goods produced out of the woollen fabrics which had been imported duty free. The records of the case clearly show that woollen fabrics were sent to job workers for production, the job worker manufactured suits and the suits were exported directly from the job worker’s premises. The export had been accepted by the Customs authorities as satisfying the requirement under the DEEC licence. Thus, the appellant’s obligation under the duty free import licence remains fulfilled. The duty demand and other proceedings cannot arise in such a case. In this view of the matter, the appeal merits acceptance. The impugned order is, therefore, set aside and the appeal is allowed.
(Operative part of the Order was already pronounced in the open Court on 21-4-2005).