ORDER
Chittaranjan Satapathy, Member (T)
1. Heard both sides. The appellants are a 100% E.O.U. They have obtained duty free POY, converted the same by texturising to PTY which has been removed for weaving to various job workers and grey fabrics have been received back and the same have been cleared as deemed export under CT-3 certificates. The appellants applied for on 27.11.000 to the Development Commissioner for expanding their activities from texturising to weaving of grey fabrics, dying and printing of fabrics and also manufacturing readymade garments. The Development Commissioner issued a permission for broad banding on 18.1.2001 permitting them to produce dyed and printed fabrics as well as readymade garments but there was omission regarding grey fabrics which has been corrected by issue of a corrigendum on 3.5.2001. In between the appellants also obtained a permission from the jurisdictional Deputy Commissioner on 7.3.2001 to clear PTY for manufacture of grey fabrics by the job workers. The permission was subject to the Development Commissioner correcting the broad banding approval to include weaving of grey fabrics.
2. In view of late issue of the corrigendum, the appellants have been asked to pay over Rs. 56 Lakhs towards duty on the PTY cleared to the job workers and additionally Rs. 26.5 Lakhs being the duty on the POY which was the raw material. The adjudicating Commissioner has also imposed penalty of over to Rs. 82.5 Lakhs on the appellant company and Rs. 5 Lakhs and Rs. 2 Lakhs on the other two appellants who are Directors in the appellant company.
3. After hearing both sides and perusal of case records, we find that the broad banding permission issued by the Development Commissioner clearly omits weaving of fabrics. However, the same has been corrected by issue of a corrigendum. Such omission is an obvious error as no dyed and printed fabric or readymade garment can be produced from texturised yarn without producing the grey fabrics by weaving. In view of the fact that such an obvious error was initially made and subsequently corrected by the Development Commissioner, the appellants can not be held responsible for the same. We find that the appellants have taken all steps to fulfil the obligation of exporting the finished goods and no question has been raised in that regard. They have also taken necessary permission from customs authorities for removing the PTY for weaving on job work and they have received back the grey fabric which they have accounted for. As such, we are of the view that the demand made against them and penalties imposed are totally unjustified. Hence, we set aside the impugned order and allow the appeals.
(Dictated in open court)