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2018 (6) TMI 1071 - AT - Central Excise100% EOU - Validity of SCN - misuse of the facility of duty-free procurement of fuel and lubricants under N/N. 53/97-Cus dated 3rd June 1997 and N/N. 1/95-CE dated 4th January 1995 for imported goods and indigenously sourced goods - Held that - A case was attempted to be made out that respondent had manipulated the records to supress efficiency of production of power and thus divert the surplus power by claiming to have used fuel procured from outside. The power transmitted out of the plant was closely monitored by electricity transmission agency to ensure discharge of wheeling charges. The notices have failed to establish that any norms existed for comparison with actual deployment of inputs for generation of power - appeal dismissed - decided against Revenue.
Issues:
1. Bar of limitation in issuing show cause notices. 2. Misuse of duty-free procurement of fuel and lubricants. 3. Allegations of evasion and lack of evidence. 4. Discharge of duty liability on surplus power. 5. Procurement of sub-standard inputs. 6. Alleged manipulation of records. 7. Lack of evidence to substantiate allegations. Analysis: 1. The case involved three show cause notices issued to M/s Hanil Era Textiles Ltd regarding the misuse of duty-free procurement of fuel and lubricants under specific notifications. The Commissioner of Central Excise dropped the demands partly due to the bar of limitation and lack of evidence of evasion, which led to the Revenue filing an appeal against this decision. 2. M/s Hanil Era Textiles Ltd was accused of selling power outside without discharging duty liability on surplus power. The company claimed to have procured sub-standard inputs and not availed the exemption benefits. The Revenue challenged the bar of limitation, arguing that the earlier dispute was different, but the Tribunal disagreed, stating the issue was related to the same exemption. 3. The Tribunal found no evidence of suppression or non-accountal of procurement of fuel or consumables against certificates entitling duty-free procurement. It was noted that power could have been generated with duty-paid material, and the allegations of sub-standard procurement to pass on MODVAT credit were unsubstantiated. 4. Allegations were made that the company manipulated records to suppress production efficiency and divert surplus power. However, the notices failed to establish norms for comparison with actual deployment of inputs for power generation. The power transmitted out of the plant was monitored for wheeling charges, but no conclusive evidence was presented. 5. Ultimately, the Tribunal upheld the decision to dismiss the Revenue's appeal, citing the lack of evidence to interfere with the initial order. The judgment was pronounced on 31st May 2018 by the Tribunal members involved in the case.
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