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2009 (5) TMI 665
The appellate tribunal CESTAT, Ahmedabad, presided over by Shri B.S.V. Murthy and Ms. Archana Wadhwa, heard an appeal filed by M/s. Krishak Bharti Co-op. Ltd., a company engaged in manufacturing fertilizers under CH.SH. No. 3102.00 of CETA, 1985. The company procured raw materials through various procedures for manufacturing fertilizers and other products. During an audit, it was discovered that the company had used duty-free materials inappropriately, leading to a demand for Central Excise duty. Specifically, the company had sold steam, treated water, and de-mineralized water to the Heavy Water Plant without paying Central Excise duty. The Commissioner (Appeals) upheld the demand for duty on these items, leading to the current appeal.
The tribunal considered the issue of the durability of NGN/ARN used for generating steam supplied to the Heavy Water Plant. The Commissioner had confirmed the demand for duty on NGN/ARN, citing that the goods were not eligible for retrospective exemption under Notification No. 23/2004. The tribunal upheld the Commissioner's decision on NGN/ARN, noting that the goods were not eligible for the exemption prior to the notification. The penalty was set aside, and the tribunal found that there was no intention to suppress facts. The duty liability of Rs. 1206/- on NGN/ARN for the period August 2003 to March 2004 was upheld, while the appeal was allowed for the other two items. The decision was pronounced in court on 29-5-09.
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2009 (5) TMI 664
Issues:
Waiver of predeposit of duty of excise under Section 11A(2) with interest under Section 11AB and penalty under Rule 25 of the Central Excise Rules based on the applicability of Notification No. 43/2001-C.E. (N.T.) to 100% EOU clearances of Spray Dried Instant Coffee Power to a DTA unit for ultimate export.
Analysis:
1. Applicability of Notification No. 43/2001-C.E. (N.T.) to 100% EOU clearances:
The issue in question revolved around the demand for duty on the grounds that the benefit of Notification No. 43/2001 was not applicable to 100% EOU clearances of Spray Dried Instant Coffee Power to a DTA unit. The adjudicating authority confirmed the demand based on the requirement that the provisions of the Central Excise (Removal of Goods at Concessional Rate of Duty For Manufacture of Excisable Goods) Rules, 2001 must be fulfilled. However, the Tribunal noted that the benefit of the notification is available to 100% EOU as per established legal precedents. The Tribunal found that the allegation in the show-cause notice was contrary to settled legal positions and that the order had gone beyond the notice's scope in disentitling the assessees from the notification's benefits. The Tribunal emphasized that the 2001 Rules should be followed with effective changes, and cited legal decisions to support its view.
2. Prima facie case for unconditional waiver:
After considering the arguments and legal positions presented, the Tribunal concluded that the assessees had made out a strong prima facie case for unconditional waiver. As a result, the Tribunal decided to dispense with the predeposit of duty, interest, and penalty, and stayed the recovery pending the appeal. This decision was based on the view that the assessees were entitled to the benefits of the notification and that the demand for duty was not sustainable in light of the legal interpretations provided.
In conclusion, the judgment by the Appellate Tribunal CESTAT, CHENNAI, delivered by Ms. Jyoti Balasundaram and Shri P. Karthikeyan, focused on the applicability of Notification No. 43/2001-C.E. (N.T.) to 100% EOU clearances of Spray Dried Instant Coffee Power to a DTA unit. The Tribunal found that the assessees had a strong prima facie case for unconditional waiver of predeposit of duty, interest, and penalty, as they were entitled to the benefits of the notification based on established legal precedents and interpretations.
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2009 (5) TMI 663
Valuation - Insurance charges - demand on the ground that appellant have received more insurance charges from their customers then the actual amount spent by them - Held that:- Any excess recovery on account of the insurance activity cannot be added to the assessable value.
It is not the Revenue’s case that the assessable value adopted in other cases, where no insurance service was being provided, is depressed or incorrect. There is also no other evidence on record indicating that such recovery of more insurance amount was on account of the value of the cleared products - Reliance placed in the case of BARODA ELECTRIC METERS LTD. VERSUS COLLECTOR OF CENTRAL EXCISE [1997 (7) TMI 126 - SUPREME COURT OF INDIA].
As the appeal has been allowed on merits the appellants’ plea of the demand being barred by limitation is not being considered.
Appeal allowed - decided in favor of appellant.
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2009 (5) TMI 662
Cenvat/Modvat - Capital goods - Res judicata - Same dispute and parties - Held that: - it appears from subsequent Order dated 25-2-2008 that these items were used as part of sugar manufacturing system and credit are eligible under Rule 2(b) of the said Rules - Cenvat Credits are admissible on these items - appeal allowed - decided in favor of appellant.
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2009 (5) TMI 661
The Appellate Tribunal CESTAT, Kolkata found that the Assistant Commissioner's direction to deposit the full duty and penalty amount was contrary to the stay order. The Assistant Commissioner was ordered to explain in person why the directive was issued. The order was dictated and pronounced in open court.
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2009 (5) TMI 660
The Appellate Tribunal CESTAT, Chennai upheld duty demands of Rs. 21,850 and Rs. 1,26,720 with 20% interest due to non-fulfillment of conditions for duty exemption. Both conditions of the notification needed to be met for benefit extension. The appeals for proportionate reduction of duty were rejected. (2009 (5) TMI 660 - CESTAT, CHENNAI)
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2009 (5) TMI 659
Issues involved: Condonation of delay in filing Rectification of Mistake (ROM) u/s 35C(2) of the Central Excise Act, 1944.
Summary:
Issue 1: Condonation of delay in filing ROM
The Appellant sought Rectification of Mistake (ROM) in the Tribunal's Order after a delay of more than 1 year and 3 months. The Appellant argued that the delay should be condoned citing the Tribunal's inherent power to recall its own Order in the interest of justice, referencing the case of Sunitadevi Singhania Hospital Trust v. Union of India. The Respondent opposed the condonation, highlighting the statutory limitation of 6 months for seeking rectification under Section 35C(2) of the Central Excise Act, 1944, supported by various case laws and judgments. The Respondent emphasized the need for strict application of the limitation period as provided by the Statute. After considering both arguments, the Tribunal rejected the Misc. Application for condonation of delay and dismissed the ROM as time-barred, distinguishing the exceptional circumstances of the cited Supreme Court judgment.
End of Summary
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2009 (5) TMI 658
The Appellate Tribunal CESTAT, Kolkata found that the utilization of credit by the respondents before 18-8-2000 for duty payments was not violative of any rules. The Tribunal held that the restriction on credit utilization introduced on 18-8-2000 cannot be applied retrospectively. Therefore, the department's appeal was dismissed.
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2009 (5) TMI 657
Issues:
1. Calculation error in customs duty value.
2. Rejection of refund claim.
3. Challenge of refund grant.
4. Commissioner (Appeals) remand decision.
5. Applicability of Section 154 of Customs Act, 1962.
6. Power of Commissioner (Appeals) to remand the case.
7. Competence of Commissioner (Appeals) to pass order.
Analysis:
1. The appellant imported a consignment with a clerical error in value calculation, leading to the payment of excess customs duty. A refund claim was filed due to the error, which was initially rejected.
2. The initial refund rejection was challenged, and the Tribunal set aside the order-in-appeal, citing Section 154 of the Customs Act, 1962 for the refund due to a simple arithmetic miscalculation. The matter was remanded for fresh consideration by the Deputy Commissioner.
3. During the remand proceedings, the Deputy Commissioner granted the refund after reviewing the documents. However, the grant was challenged before the Commissioner (Appeals) on grounds related to the transfer of goods and the use of a Chartered Accountant certificate as conclusive evidence.
4. The Commissioner (Appeals) remanded the case back to the adjudicating authority for further consideration, leading to an appeal by the appellant against the decision.
5. The appellant argued against the remand decision, citing the provisions of sub-section (3) of Section 128A of the Customs Act, 1962, emphasizing that the Commissioner (Appeals) should have passed an order based on the documents before him.
6. The Tribunal, after considering the arguments and legal references provided by the appellant's counsel, found that the Commissioner (Appeals) had erred in remanding the case back to the adjudicating authority. The Tribunal directed the Commissioner (Appeals) to pass an appropriate order based on the documents within three months.
7. Ultimately, the appeal was allowed, and the Tribunal emphasized the competence of the Commissioner (Appeals) to pass an order directly after considering the documents presented, rather than remanding the case unnecessarily.
This detailed analysis highlights the procedural and legal aspects of the judgment, focusing on the errors in value calculation, refund rejection, remand decision, and the correct application of relevant legal provisions.
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2009 (5) TMI 656
Issues involved: Application for condonation of delay in filing the Appeal.
Summary:
The Applicant filed an Application for condonation of delay of 479 days in filing the Appeal. The impugned order was passed on 21-7-2005 and received by the Applicant on 17-8-2005. The Applicant claimed that the delay in filing the Appeal was due to a former employee not submitting the Appeal before resigning. The Applicant also presented a document purportedly showing the Appeal filed with CESTAT, but it was found to be different from CESTAT's seal and lacked necessary signatures. The Departmental Representative argued that there was no valid explanation for the delay. The Tribunal found that the Applicant failed to provide sufficient evidence of filing the Appeal in a timely manner and did not demonstrate reasonable cause for the delay. Consequently, the Application for condonation of delay, Stay Petition, and Appeal were dismissed.
In conclusion, the Tribunal dismissed the Application for condonation of delay in filing the Appeal due to lack of reasonable cause shown by the Applicant.
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2009 (5) TMI 655
Issues:
1. Application for withdrawal of misc. application for Early Hearing of the appeal.
2. Restoration of appeals based on compliance with stay order conditions.
Analysis:
1. The Revenue filed an application to withdraw the misc. application for Early Hearing of the appeal, which was dismissed as withdrawn. The Tribunal found the application to be infructuous.
2. The applicants filed applications for restoration of the appeals after the Tribunal directed them to deposit part of the demands and 10% of penalty for hearing the appeals. However, the appellants did not comply with the conditions of the stay order, leading to the dismissal of the appeals. Subsequently, the applicants filed for restoration without making the pre-deposit, and also challenged the pre-deposit order in the High Court. The High Court dismissed the writ petition, stating that the Tribunal's order merged with the High Court's order. Since there was no modification by the High Court, the Tribunal found no merit in the applications and dismissed them.
This judgment highlights the importance of compliance with stay order conditions and the impact of challenging such orders in higher courts. The decision underscores the principle that orders passed by lower tribunals merge with higher court orders unless modified, emphasizing the need for strict adherence to legal procedures in such matters.
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2009 (5) TMI 654
Issues involved: Import of Boric Acid for non-insecticidal use without a registration certificate.
Summary:
Issue 1: Requirement of registration certificate for import of Boric Acid for non-insecticidal use
The appellants imported Boric Acid for use in manufacturing glassware and kitchenware. The Advocate argued that a registration certificate, typically required for insecticides, was not necessary based on a Board's Circular. Referring to a previous Tribunal case, it was highlighted that the import for non-insecticidal use falls outside the scope of the registration requirement. The Advocate also presented a certificate from a research institute confirming the non-insecticidal purpose of the imports. The Department's reliance on a different case involving excess quantity against a registration certificate was deemed inapplicable to the current scenario.
Issue 2: Applicability of previous Tribunal decisions
Considering the specific circumstances of the case where the import was not for insecticidal use, and in line with the precedent set by the Hardware Trading Corporation case, the impugned Order was set aside. The appeal was allowed, granting consequential benefits to the appellants.
This judgment by the Appellate Tribunal CESTAT, Kolkata, underlines the importance of the purpose of import in determining the necessity of a registration certificate, especially in cases involving substances like Boric Acid intended for non-insecticidal use.
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2009 (5) TMI 653
Stay/Dispensation of pre-deposit - Exemption - Burden of proof - Held that: - it is apparent that the demand raised has no leg to stand, certainly, it would be undesirable to require the assessee to deposit full or even substantial part of the demand. However, a waiver of pre-deposit, which admittedly relates to the payment of excise duty is sought on the basis of exemption notification, then the assessee has to make out a prima facie case regarding the same, besides establishing financial hardship - The applicant having failed to make any prima facie case for the grant of waiver, the application is liable to be dismissed.
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2009 (5) TMI 652
The Appellate Tribunal CESTAT, KOLKATA, in the 2009 (5) TMI 652 case, was presided over by Shri S.S. Kang and Dr. Chittaranjan Satapathy. The appellant, represented by S/Shri S.K. Bagaria and Partha Banerjee, sought relief from the Tribunal as the Revenue was demanding payment despite a stay order. The Tribunal had previously directed the Assistant Commissioner of Central Excise to attend the hearing, where it was discovered that the Tribunal had waived the pre-deposit of the remaining duty and penalty, subject to a deposit of Rs. 80,000. The Tribunal found that the recovery of the remaining amount was stayed as per Section 35F of the Central Excise Act and quashed the Assistant Commissioner's directive to deposit the disputed amount. Additionally, a Revenue clarification application was deemed unnecessary, and the appellant's request for an early appeal hearing was dismissed due to the appeal's year of origin being 2009.. The judgment was pronounced and dictated in open court.
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2009 (5) TMI 651
Issues:
Classification of fruit juice under Chapter Heading 22.02 vs. Chapter Heading 2001.10.
Validity of Notification No. 16/91-C.E. (N.T.) issued under Section 11C of the Central Excise Act, 1944.
Classification Issue:
The appeal involved a dispute regarding the classification of fruit juice manufactured by the assessee under Chapter Heading 22.02, as opposed to the classification claimed by the assessee under Chapter Heading 2001.10. The Commissioner of Central Excise (A) had set aside a demand of Rs. 2,59,544/- confirmed against the assessee by the Assistant Commissioner. However, the Appellate Tribunal found that it was unnecessary to delve into the classification issue due to the existence of Notification No. 16/91-C.E. (N.T.) issued under Section 11C of the Central Excise Act, 1944. This notification provided an exemption to fruit pulp based drinks falling under Heading No. 22.02 during a specific period. The Tribunal, after considering the notification, concluded that no demand could be sustained against the respondents based on the classification issue, thereby rejecting the appeal of the revenue.
Notification Validity Issue:
The crux of the judgment revolved around the validity and applicability of Notification No. 16/91-C.E. (N.T.) issued by the Central Government under Section 11C of the Central Excise Act, 1944. The notification specifically addressed the exemption to fruit pulp based drinks falling under Heading No. 22.02 during a specified period due to a prevalent practice regarding the levy of excise duty. The Tribunal, after a thorough examination of the notification, held that the exemption provided therein shielded the respondents from the demand raised by the revenue. By invoking the provisions of the notification, the Tribunal concluded that the duty of excise, which was short-levied during the specified period, was not required to be paid by the respondents. Therefore, the Tribunal upheld the validity of the notification and ruled in favor of the respondents, dismissing the appeal of the revenue.
This comprehensive analysis of the judgment highlights the pivotal issues of classification and the validity of the notification, elucidating the Tribunal's reasoning and decision-making process in resolving the appeal.
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2009 (5) TMI 649
Issues Involved:
1. Classification of Excisable Product
2. Consistency in Departmental Classification
3. Prima Facie Case for Grant of Stay
4. Applicability of Precedents
5. Department's Authority to Change Classification
6. Stay of Penalty and Interest
Detailed Analysis:
1. Classification of Excisable Product:
The primary dispute concerns the classification of an excisable product. The Department classified the product under Chapter 8536.90.90 of the tariff, while the appellants argued it should fall under Heading 4810.39.20 and 4805.93.00. The authorities below upheld the Department's classification under 8546.90.90, rejecting the appellants' claim.
2. Consistency in Departmental Classification:
The appellants contended that the same product manufactured in Karnataka was classified under 4810.39.00 and 4810.39.20, and thus, there was no justification for different treatment for the product manufactured in Sonepat. They argued that the Department should not take discriminatory stands for the same product manufactured by the same company at different locations.
3. Prima Facie Case for Grant of Stay:
The appellants claimed a prima facie case for a stay without the requirement of pre-deposit, highlighting that they had already deposited Rs. 7,50,000/- by the firm and Rs. 20,000/- by the individual appellant. They relied on various decisions to support their contention that the Department cannot take inconsistent stands for the same product.
4. Applicability of Precedents:
The appellants referred to several Supreme Court decisions, including Damodar J. Malpani v. Collector of Central Excise, Mallur Siddeswara Spinning Mills (P) Ltd. v. C.C.E., Coimbatore, and Marsons Fan Industries v. Commissioner of C.Ex., Calcutta, to argue that once a classification is accepted, the Department cannot change it without sufficient justification.
5. Department's Authority to Change Classification:
The Department argued that there is no bar on taking a different view in subsequent years if warranted by the facts. They cited decisions like Collector of Central Excise, Hyderabad v. Bakelite Hylam Ltd., and C.C.E., Bangalore v. Senapathy Symons Insulations (P) Ltd., to support their stance that different factual situations can justify a different classification.
6. Stay of Penalty and Interest:
The Tribunal acknowledged that it is not expected to delve deeply into the merits of the case while dealing with a stay application. However, it found that the product undergoes fourteen tests before acquiring its final character, which prima facie supports the Department's classification under 8546. The Tribunal allowed the stay application for the penalty but dismissed it for the demand of duty and interest, directing the appellants to deposit the balance amount within twelve weeks.
Conclusion:
The Tribunal concluded that there is no bar on the Department taking a different view in appropriate cases. The materials on record did not support the appellants' contention that the product should be classified under 4805. The stay application for the penalty was allowed, while the application for the demand of duty and interest was dismissed. The appellants were directed to deposit the balance amount within twelve weeks.
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2009 (5) TMI 648
Issues:
1. Non-confiscation of impugned goods
2. Payment of interest
3. Dropping of proceeding against noticees
Analysis:
Non-confiscation of impugned goods:
The first issue pertains to the non-confiscation of the impugned goods, with the main concern being the reclassification of the goods. The judgment highlights that the decision made by the adjudicating Commissioner to not confiscate the goods, which were already released, is deemed appropriate. This is due to the fact that there has been a demand for differential duty and the imposition of a penalty. The Tribunal concludes that there is no necessity to intervene in the decision regarding the confiscation of goods.
Payment of interest:
The second issue raised is regarding the payment of interest, as the Commissioner did not issue any specific orders in this regard. The Tribunal notes that it is established law that the department can recover interest as per the applicable law without the need for a separate order. Consequently, the appeal by the department on this ground is considered to be unsustainable.
Dropping of proceeding against noticees:
Lastly, the department expresses dissatisfaction with the dropping of proceedings against three noticees. However, the judgment clarifies that since no separate appeals have been filed against these noticees, the Tribunal is not obligated to make any rulings concerning them. As a result, the department's appeal is dismissed in its entirety.
In conclusion, the Appellate Tribunal CESTAT, Kolkata, through the judgment delivered by the Member (T), upholds the decision of the adjudicating Commissioner on the non-confiscation of goods, dismisses the appeal regarding interest payment, and finds no grounds to address the issue of dropping proceedings against the noticees due to the absence of separate appeals.
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2009 (5) TMI 647
Issues: Lack of communication of charges, Ignored submissions, Violation of RBI regulations, Disproportionate penalty and fine
The judgment addresses the issue of lack of communication of charges against the appellants before passing the impugned order. The advocate for the appellants argued that the adjudicating Commissioner ignored the submissions made on behalf of the appellants regarding similar imports of gold allowed at another port. It was also highlighted that the Board's Circular from 2004, permitting such imports, was not considered. The Tribunal found that no show-cause notice was issued to the appellants, and the adjudicating Commissioner failed to specify the RBI Regulations violated by the appellants, leading to confusion. The penalty and fine imposed were deemed disproportionately low if any regulations were indeed violated. The Department representative later admitted that the relevant RBI instruction dated 9-7-04, allegedly violated by the appellants, was not provided to them before the impugned order.
Another issue raised was the violation of RBI regulations by the appellants. The Department claimed that the RBI instruction dated 9-7-04 had been breached. However, this instruction was neither disclosed to the appellants before the impugned order nor mentioned in the order itself. The Tribunal concluded that without the specific charge communicated to the appellants and the relevant RBI regulation cited in the impugned order, the order could not be upheld. Consequently, the judgment set aside the impugned order and remanded the case to the adjudicating Commissioner. The Commissioner was instructed to communicate the exact charges to the appellants, including the relevant RBI regulations, and provide an opportunity for the appellants to defend themselves adequately.
In summary, the judgment highlighted the importance of communicating charges to the appellants, considering their submissions, and specifying the regulations allegedly violated. It emphasized the need for transparency and fairness in adjudication, ensuring that all relevant information is provided to the concerned parties. The decision to remand the case for re-adjudication aimed to uphold the principles of natural justice and due process, allowing the appellants to present their defense effectively.
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2009 (5) TMI 646
Issues: Classification of goods under Customs Tariff Act
In this judgment by the Appellate Tribunal CESTAT, New Delhi, the issue involved was the classification of imported goods under the Customs Tariff Act. The Revenue was aggrieved by the order of the Commissioner (Appeals) classifying the goods as Marble under Chapter Heading No. 2515.11. The Appellate Tribunal noted that the goods were subjected to a technical test which revealed them to be limestone, as confirmed by the Geological Survey of India. The Tribunal emphasized that when interpreting a tariff entry, the scientific or technical sense should prevail over common parlance theory, citing the Supreme Court's decision in Akbar Badruddin Jiwani v. CC. The Tribunal found no merit in the Commissioner's decision and allowed the Revenue's appeal, restoring the original order.
The Tribunal highlighted the importance of interpreting terms in tariff entries according to their scientific or technical meaning rather than common parlance theory. Citing the Supreme Court's decision in Akbar Badruddin Jiwani v. CC, the Tribunal emphasized the need to rely on technical expert reports and test results to determine the classification of goods accurately. In this case, the Tribunal found that the goods in question, which had been tested and confirmed to be limestone, were incorrectly classified as marble by the Commissioner (Appeals). The Tribunal's decision to uphold the scientific and technical interpretation of the goods' classification under the Customs Tariff Act demonstrates the significance of expert analysis in such matters.
Moreover, the Tribunal noted the absence of the respondent during the proceedings, indicating a lack of participation in the legal process despite being in the third round of litigation. The Tribunal observed that the respondent's failure to engage in the appeal process showed a disregard for the opportunity to present a defense before a legal forum. As a result, the Tribunal allowed the Revenue's appeal and restored the Order-in-Original, emphasizing that the respondent's absence should not be considered as a basis for future cross-objections. The Tribunal's decision underscores the importance of active participation in legal proceedings and the consequences of failing to exercise one's right to remedy before a legal forum.
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2009 (5) TMI 643
Stay/Dispensation of pre-deposit - Cenvat/Modvat - Interpretation of statutes - Held that: - the amendment to Cenvat Credit Rules, 2004 should be taken to be clarificatory in nature as the word “substituted” has been used - tax is compulsory contribution to the support of Government, levied on persons, property, income, commodities, transactions etc. now at fixed rates mostly proportional to the amount on which the contribution is levied.” In view of this the amount of 10% levied and also to be treated as tax and all the provisions of SEZ Act would be applicable to the said amount. Therefore, we order complete waiver of the dues demanded in the impugned order - appeal allowed - decided in favor of appellant.
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