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2024 (6) TMI 1005 - AT - Central ExciseIssues involved: The issues involved in this judgment include the demand of duty confirmed on the quantity of furnace oil allegedly not used in the generation of electricity, compliance with the conditions under Notification No.22/2003-CE dated 31.03.2003, and the limitation period for issuing the demand notice. Comprehensive Details: Issue 1: Compliance with Notification No.22/2003-CE The appellant, a 100% EOU for manufacturing cotton yarn and generating electricity, faced a demand of duty for a shortfall in electricity generation based on Input-Output norms. The appellant argued that they complied with Condition No.7 of Notification No.22/2003-CE, which allows surplus power transfer to DTA. The appellant maintained that they fulfilled NFE criteria and export obligations, and duty was paid on DTA supply as per approved norms. The demand solely based on less electricity generation cannot be sustained, as per precedents like Goodluck Garments Pvt. Ltd. Vs. CCE and IOCEE Exports Ltd. Vs. CCE. Issue 2: Limitation Period for Demand Notice The appellant contended that the demand notice issued after 3½ years from the audit report is time-barred, as there was no intent to evade duty, and all transactions were duly recorded. Citing judgments like Cosmic Dye Chemical Vs. CCE and Continental Foundation Joint Venture Vs. CCE, the appellant argued against the imposition of penalty. Conclusion: The Tribunal found that the demand of duty based on the shortfall in electricity generation, without evidence of diversion of furnace oil, cannot be upheld. Citing judgments from Gujarat High Court and Madras High Court, the Tribunal set aside the impugned order and allowed the appeal with consequential relief, if any, as per law.
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