9911796707
TMI Blog2024 (6) TMI 1005X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2. Briefly stated the facts of the present case are that the appellant, a 100% EOU engaged in the manufacture and export of cotton yarn falling under Chapter 52, 55, 58 and 63 of the Central Excise Tariff Act, 1985. On the basis of AG Audit, a show-cause notice was issued to them on 18.12.2009 alleging that the amount of furnace oil consumed in the generation of electricity as per the Input-Output Norms revealed a short fall of 18,39,062 kgs. valued at Rs.1,99,89,220/- and the excise duty foregone thereon amounts to Rs.32,62,241/-. Consequently the same was demanded with interest and penalty invoking extended period of limitation. On adjudication, the demand was confirmed with interest and penalty. On appeal by the appellant, the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t as permitted. The appellant has reversed / paid appropriate duty on such DTA supply as per the Input-Output norms approved by the CSEA. There is no allegation by the Department that duty free furnace oil has been diverted or not to put to use for the approved purposes. Therefore, there was no question of contravention of any of the conditions of Exim Policy or Notification No.22/2003-CE dated 31.03.2003. He has submitted that the only condition which relevant for the present purpose is Condition No.7 of the Notification NO.22/2003-CE which has been duly complied with by the appellant. The Input-Output norm approved by CSEZ was only for fulfilment of Condition No.7 of the Notification in question i.e. "for DTA supply of power and for recko ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olved in the present appeal for determination is whether the demand of duty confirmed on the quantity of furnace oil alleged to have been not used in the generation of electricity resulted in no complying with the conditions laid down under Notification No.22/2003-CE dated 31.03.2003. Undisputedly, the demand has been confirmed alleging that the appellant had contravened the Condition No.7 of the Notification No.22/2003-CE dated 31.03.2003. The relevant condition No.7 of the said Notification reads as follows:- 7. Without prejudice to other provisions of this notification, where the said officer is satisfied that the user industry, which has been permitted by the concerned State Electricity Board in this behalf and has been permitted by D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fer excess power of 3.5 MW into DTA subject to the Input-Output Norms as recommended by the Central Electricity Authority. The Input-Output norms Input: Furnace Oil -194.4 gms; Lube Oil-091 gms Output: Generation of one unit of power 9. On a backward calculation of the electricity generated by the Departmental Audit, it is objected that applying the Input-Output norms, there was a shortfall of 94,11,782 units than the electricity generated for which 18,39,062/- kgs. of furnace oil would have been used; to this extent, the foregone duty was Rs.32,62,241/-. The appellant explained that the shortfall in generation of electricity on use of the said quantity of input attributed to various circumstances and also submitted that they have compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is no allegation with regard to diversion of goods, merely because the wastage norms are not satisfied, the Assistant Collector of Customs can record satisfaction to the effect that the goods have not been used for the manufacture of articles for export. The Appellate Tribunal was, therefore, not justified in confirming the Customs duty on imported raw materials contained in wastage in excess of input-output norms under the Export Import policy. The said judgment was followed by the Hon'ble Madras High Court in the case of IOCEE Exports Ltd. (supra). The High Court has observed as follows:- 7. In our view, the standard input-output norms can be treated as an indicator and that may not be a sole reason for initiation of proceedings. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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