DALVEER BHANDARI, J.

( 1 ) THE questions of law involved in all these appeals are identical, therefore, we propose to dispose of these appeals by this common judgment. For the sake of convenience, the facts of Civil Appeal Nos. 813-814 of 2004 are recapitulated as under:

( 2 ) THE respondent M/s M. M. K. Jewellers is a unit in santacruz Electronics Export Processing Zone, engaged in the manufacturing of plain/studded/unstudded gold jewellery for export from directly imported gold or from the gold procured from MMTC in terms of Notification No. 196/87-Cus dated 5. 5. 1987 which was further amended by Notification No. 155/92-Cus dated 30. 3. 1992 and Notification No. 177/94-Cus dated 21. 10. 1994. The said notification, inter alia, permitted graded percentage of gold wastage or loss depending on the value addition achieved, on the jewellery of the description specified therein, and provided that scrap, dust or sweepings may be forwarded to the Government Mint by the importer for conversion into standard gold bars and returned to the said zone in accordance with the procedure specified by the commissioner of Customs in this regard. Amongst other conditions, the said notification required that the importer shall maintain a proper account of import, consumption and utilization of the goods and of exports made by him. Public notice No. 2/1988 dated 28/7/1988 issued by the commissioner of Customs, Airport in terms of the abovesaid notification required the units in SEEPZ to maintain registers as per proforma annexed thereto.

( 3 ) ON 11/11/1995, acting on information that the Gem and jewellery Units in SEEPZ have been misusing the facility by showing excess manufacturing wastage or loss than permissible under the above mentioned notification, causing shortage in physical stock, claiming it to be lying in the form of dust, the Officers of the Mumbai Customs Preventive commissionerate visited the premises of the said unit and verified the records from the period of inception of the unit and took the physical stock of gold followed by detailed investigations which resulted in the detection of a shortage of 6410. 885 grams of gold, valued at Rs. 28,72,076. 48. The respondent unit was found to have not been maintaining the wastage Account Register prescribed vide Public Notice No. 2/88 dated 28/7/1988.

( 4 ) DURING the investigation, the respondent unit claimed that the excess manufacturing wastage/loss took place in the production of jewellery and the same was available in the form of dust/slurry and the gold was recoverable by refining the same and the claim of loss made at the time of export was approximation.

( 5 ) THE EXIM Policy (1992-97) in para 90 prescribes the admissibility of gold wastage or manufacturing loss as specified in para 147 of the Hand Book Procedures and the table-I thereto whereby the actual wastage or loss is admissible only "upto" the extent prescribed and as according to the said Customs Notification issued in this behalf.

( 6 ) THE wastage norms specified in para 147 of the 'hand book of Procedures' in respect of mounting and findings are applicable only in cases where the mountings and findings have been manufactured from imported gold and exported as such and no wastage is admissible if the mountings and findings are imported as they are used as such in jewellery which is then exported in terms of the explanation given below in the 'table' to clause 10 of Notification No. 177/94 and as clarified by the Ministry of Finance vide letter f. No. 305/91/94ftt dated 11. 10. 1994.

( 7 ) NO further loss is permitted on the repairs of the imported products as the claim of loss is admitted at the time of an initial export of the products.

( 8 ) FROM the above, it appears that the respondent has failed to maintain the 'wastage Account Register' for the purpose of monitoring the actual manufacturing wastage or loss but claimed the maximum wastage/loss of claim as mentioned above was made farce and thus they violated the con