Case Law Details
GKB Vision Ltd. Vs Commissioner of Customs (NS-V) (CESTAT Mumbai)
The twin issues that required consideration in this case are that as to whether the appellants would be eligible for the higher norms fixed by Ministry in respect of wastage/ loss/ breakage of raw materials and as to whether the demand is premature. On going through the records of the case, we find that the appellants have represented to the Ministry to revise the SION norms in blanks imported by them. Ministry after considering the request of the appellants have communicated to the development commissioner that a wastage of 15 percent has been fixed and the development commissioner may take necessary action under para 6.7(e) of Hand Book of Procedures Volume-I. Thus, we find that in view of the decisions dated 23/9/2008 and 26/11/2008 of the Commerce Ministry, in the appellant’s case the wastage norms were fixed at 15 percent as against the earlier norms of 9.09 percent. We are of the considered opinion that the Revenue is bound by the norms fixed by SION norms fixed by the Ministry of Commerce and therefore the benefit of the same has to accrue to the appellants. We find that to that extent the impugned orders are not sustainable and as per the directions of the Hon’ble High Court of Goa, the order dated 29/9/2017 passed by this bench needs to be amended/ rectified to that extent.
FULL TEXT OF THE CESTAT MUMBAI ORDER
The Appellants, a recognized 100% Export Oriented Unit, are engaged in the manufacture of ophthalmic lenses falling under sub heading 90014000 of Central Excise Tariff Act, 1985; the rough ophthalmic lenses blanks required for the manufacture of ophthalmic lenses were imported by the appellants without payment of duty of Customs in terms of Notification No. 52/2003-Cus dated 31.03.2003, which exempts, inter alia, raw materials imported by the EOU for use in the manufacture of export goods; Revenue alleged that breakage, wastage and scrap of the lenses generated by the appellant were more than 9.09% provided for in the SION; show cause notices were issued and were confirmed by the Original Authority as well as first Appellate Authority; being aggrieved by the order, appeal s were preferred before the Hon’ble Tribunal, which vide order dated 13.09.2017 & 14.09.2017 confirmed that duty was recoverable as the wastage permitted was more than 9%; however, Tribunal set aside the penalty under Section 112(b) and 117 of Customs Act, 1962; applications for rectification of mistake, filed by the appellant were also dismissed; the appellant filed appeals before the Hon’ble High Court at Bombay at Goa; High Court set aside the orders and remanded back to the Tribunal for fresh disposal on merits in accordance with law and also to consider the Ministry decision dated 23.09.2008 and 26.11.2008; hence, the present appeals.
2. Learned Counsel for the appellants submits that its alleged that breakages, wastages and rejects of the lenses, during the process of production, exceeded the limit of 9.09% prescribed by the Input-Output norms (110:100); the appellants moved an application dated 05.09.2006, to DGFT, for the modification of SION; Ministry of Commerce and Industry, Government of India, New Delhi, vide letter,F.No.01/87/162/164/AM-08/DES-IV/ 2175 dated 23.09.2008, informed the appellants that the NORMs COMMITTEE in its meeting no.22/09 dated 27.08.2008 has taken a decision to fix the wastage norm for appellant product to 15%; Appellants represented, to the Ministry of Commerce and Industry, Government of India, vide letter dated 24.09.2008, that the NORMs COMMITTEE vide its meeting dt 29/09/2008 changes the description of the import item from “Relevant Ophthalmic Lenses of Glass” to “ Relevant Ophthalmic Blanks of Flass” as mentioned in the decision dated 27.08.2008;Ministry, vide letter F.No. No. 01/87/162/614/AM-08/DES-IV/2830 dated 26/11/2008 informed that the wastage norms fixed are to be given retrospective effect.
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