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TMI Blog2007 (11) TMI 690X X X X Extracts X X X X X X X X Extracts X X X X ..... ting 4 MW of electricity. One sot was standby while two were being used to generate electricity required. 2. As per the EOU scheme, for the raw material and the capital goods required by an EOU, Notification No. 1/95-CE was issued enabling an EOU to procure goods without payment of duty from the domestic tariff area, while notification 53/97-Cus entitled the EOU to import such goods without payment of duty. IIL had procured fuel (furnace oil mentioned in the Customs Notification table) for generation of Electricity. 3. Consequent to certain intelligence gathered by the officers as regards diversion of furnace oil, certain enquiries were launched and a show cause notice was issued, which was adjudicated by the Commissioner and following du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emoved in the garb of waste of yarn under provisions of Section 11A of Central Excise Act, 1944 read with Section 28 of the Customs Act, 1962 and pertains to the removals in terms of the proviso to Section 3(1) of the Central Excise Act, 1944 for the period August, 1998 to March, 1999. d. Demand as per Annexure 'D' amounting to ₹ 48,44,539/- has been raised on the ground that the appellants had cleared polywool waste as wool waste by paying lower rate of duty from September, 1998 to August, 2002 and has been ordered under the provisions of Section 11A of Central Excise Act, 1944 read with Section 28 of the Customs Act, 1962. e. 1622.2 KL of furnace oil which was allegedly clandestinely removed was held to be liable to conf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1962 respectively. i. Personal penalties of ₹ 5 lakhs was imposed on Shri Sunil Kumar Jain, then General Manager, IIL, and ₹ 3 lakhs each on Shri Santosh Kumar Jain Director and Shri S.N. Maheswari Director under the provisions of Rule 209A of the Central Excise Rules, 1944 and erstwhile Rule 25 and 26 of the Central Excise (No. 2) Rules, 2001 read with Section 28A of the Central Excise Act, 1944 and Rule 25 and 26 of Central Excise Rules, 2002 and under Section 112(a) of the Customs Act, 1962. 4. Hence these appeals, which are being disposed off by this common order after hearing both sides and considering the materials on record. 5. The demands on imported furnace oil obtained by the EOU under the provisions of Notificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty. On prior permission, the furnace oil could be removed without payment of duty. Therefore, there is no malafide on the part of the appellants for not having approached the Department for permission. This may be procedural error but duty demands not upheld on merits would be found to be barred by limitation also. The Commissioner should have granted post facto approval when the request was made to him during the adjudication. The demand of ₹ 49,52,577/- in Annexure 'A' cannot, therefore, be sustained on merits and on limitation and is set aside. 6. As regards the demand in Annexure 'B' amounting to ₹ 5,00,166/- the demand is on short receipt of the furnace oil than what has been mentioned on the relevant Bills ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at any finding that the receipts are abnormally short and / or are not normal transit losses for such cargos and, therefore, cannot be condoned. In this view of the matter, the demand of ₹ 5,00,166/- as ordered cannot be upheld. 7. The Commissioner has ordered and arrived at the confiscation of 1622.2 KL of furnace oil found by him to be removed with an intent to evade duty and thus liable to confiscation under the provisions of Central Excise Law and Section 111(o) of the Customs Act, 1962. The said furnace oil, admittedly is not under seizure and thus not available for confiscation. However, he has proceeded to impose a redemption fine on M/s.IIL. In view of our findings that there is no evasion of duty on this quantity of furnace ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to arrive at the classification of the waste under heading 55.05. The mandate is to prove that the polyester fibre pre-dominates in the wastes so cleared. The Commissioner is, therefore, required to re-determine the duty demand under Annexure 'C' and 'D' after supplying the necessary documents and hearing the appellants on all issues, which they may opt to raise before him as regards the issues of duty demand under Annexure 'C' and 'D' to the notice are concerned.
10. Needless to add that the question of penalties would be determined only after the demands, if any, are quantified. The appeals of M/s. IIL are disposed off as partially allowed and partially remanded.
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