ORDER
Jyoti Balasundaram, Vice President
1. Arguing on the application for waiver of pre-deposit of duty of Rs. 56,01,879/- confirmed on Texturised Yarn and Rs. 26,59,817/- confirmed on Raw Material procured duty free under Notification No. 1/95 CE dt. 1.4.95 on the ground that the applicants who are 100% EOU engaged in the manufacture of Texturised Yam, cleared texturised yarn to sub-contractors for weaving of grey fabrics which were not shown as a resultant product in the industrial licence granted to them by the Industrial Development, Secretariat for Industrial Approvals, EOU Scheme, and penalties imposed, ld. counsel Shri Willingdon submits that vide letter dt. 27.11.2000 the applicants had applied to Development Commissioner, KFTZ, Gandhidham, to allow manufacture of grey fabrics and other products in their factory, letter of permission for manufacture of texturised yarn, dyed and printed fabrics and readymade garments was issued on 18.1.2001, the applicants applied to Development Commissioner, Kandla to modify LOP by including “Weaving of Fabrics” which modification was carried out in May 2001 and that the applicants cleared texturised yarn for weaving into grey fabrics in April 2001 after applying for modification. They submits that since the permission has been subsequently obtained and since the clearance was only after applying for permission, there has been no violation of the conditions of Notification No. 1/95 and the duty demand on the Texturised Yarn is also not sustainable prima facie.
3. The prayer is opposed by Ld. DR who reiterates the findings of the adjudicating authority.
4. We see prima facie force in the submissions of the applicants in view of the facts narrated above. We, therefore waive pre-deposit of duties and penalties of Rs. 82,61,696/- imposed upon the 100% EOU and penalties of Rs. 5,00,000/- and Rs. 2,00,000/- imposed on the Managing Director and Executive Director respectively, and stay recovery thereof pending the appeals.
(Pronounced in Court)