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2024 (4) TMI 1091 - CESTAT NEW DELHIRecovery of differential Central Excise Duty - Clearance of subsidized SSP under concessional rate of duty - Violations of the conditions of the Exemption Notification - entire production was meant for agriculture use only and it was explicitly mentioned so on every pack - case of the revenue is that after the SSP was removed and sold to IPL, IPL further sold it to Mahadhan who, further sold it to Hindustan who misused the SSP for agriculture use to manufacture other products in their industry - HELD THAT:- The diversion of SSP meant for and clearly marked as meant for agriculture use to non-agricultural use was done by Hindustan alone. It is undisputed that all bags of SSP were clearly “meant for agriculture use only”. Such being the case, there was absolutely no reason for Hindustan to have put the subsidized SSP cleared under concessional rate of excise duty and intended for agricultural use to industrial use. The submission of Hindustan in its appeal that the SSP, which it purchased, was of sub-standard quality holds no water. As rightly pointed out by the lower authorities the Fertilizer Control Order 1994 clearly requires marking of fertilizer meant for agriculture use and non-agriculture use. There is nothing in the records to substantiate the appellant’s claim that the SSP sold by Manglam to IPL and IPL to Mahadhan and further by Mahadhan to Hindustan was of sub-standard quality unfit for agricultural use. Clearly, by diverting the fertilizer meant for agriculture use to other use, Hindustan was responsible for evasion of excise duty. In fact, Manglam and IPL could not have foreseen this diversion by Hindustan. There are no justification to set aside the confiscation of the seized 33 MT of SSP or to set aside the imposition of 50,000/- redemption fine in lieu of confiscation. There are no justification to modify penalty of Rs. 20,000/- under rule 26 imposed on Hindustan by the Commissioner (Appeals). Appeal allowed.
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