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TMI Blog2002 (9) TMI 356X X X X Extracts X X X X X X X X Extracts X X X X ..... rticles for export out of India or for being used in connection with the production or packaging of goods for export out of India by such units. 2. Notification No. 1/95-C.E., dated 4-1-1995 permitted use of the very same inputs and capital goods as were allowed under the notification when procured from indigenous sources when obtained by such units without payment of Central Excise Duty. With effect from 3-6-97 Notification 53/97-Cus. granted identical facilities as were granted in the erstwhile Notification 13/81-Cus. 3. M/s. HETL had imported Diesel Generating Sets under Notification No. 13/81-Cus. and had installed them in their factory in April, 1995. From installation to July, 1998 the electricity produced was used solely for manufacture of yarn, which was the declared export commodity for the EOU. Due to labour unrest and other factors the production of the unit was hampered. The electricity generated was sold to other units through the grid of Maharashtra State Electricity Board. Permission of the appropriate authorities was secured by the unit. Intimations were filed to the Development Commissioner as well as to the Central Excise Authorities about such sale of power. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge Chrome Ltd. v. Commissioner of Customs [2001 (138) E.L.T. 609] also reported in [2001 (46) RLT 828]. He submitted that the Commissioner has attempted to distinguish this case on flimsy grounds. He submitted that the scheme permitted sale of goods manufactured for export also in the domestic market on payment of appropriate duties. He submitted that prior authorization had been secured from the Development Commissioner for sale of electricity. He submitted that electricity was not listed in either Customs Tariff or Central Excise Tariff. Therefore Para 7 of the Notification 53/97 could not come into play. It was claimed that the notification did not provide that capital goods and the inputs should be solely and exclusively used in the manufacture of export production. It was claimed that the sale of electricity was not pre-planned. If the factory had continued to manufacture as per the programme then there would have been no available electricity for sale. It was only because of the factory had labour problems, that the captive power plants were used for generation of electricity for sale. On this ground it was claimed that the demands were not sustainable and penalties were not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er dated 12-2-99 as to the modalities of permissions of such sale. The fact of sale was notified to the Development Commissioner after taking requisite permission from the State Government. 16. Shri Gupta observed that the documents nowhere indicated that specific permission was given by the Development Commissioner. We observe that although no specific permission was granted, the tenor of the correspondence suggests that permission was not denied by the Commerce Ministry. In fact the correspondence suggests and gives the modalities of such permission to the Development Commissioners 17. The Commissioner in his Order has also cited the conditions in the licence given by the Commerce Ministry and the conditions of the bond executed by the EOU. We find that this narration was not material or relevant to the issue in this case. It is correct that if the conditions of the notification are violated then duty is liable to be recovered in terms of the notification. But mere recital of the provisions does not enable the department to make such demand let alone sustain it. The Commissioner has further reproduced all the conditions in the exemption notification which also have no relevan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 3 show cause notices the demand made in one notice was barred by limitation. He stated that suppression, etc., could be alleged in the face of the intimation given by the EOU to the jurisdictional Central Excise authorities. Shri Gupta contesting this claimed that subsequent investigation showed that the stamp indicating receipt of communications dated 6-1-99 and 10-2-99 by the department were forged and also that the register maintained by the officers indicating the receipt of these communications had pre-dated entries. The correspondence in this regard however was not placed on record. The Commissioner in page 16 of his findings terms these communications as fabricated but does not give reasons for using this adjective. 23. Since on merits we have found a prima facie case made out by the EOU, at this stage we would not go into the aspect of limitation. 24. As to the aspect of the Penalties, we find the case made against the EOU and its officers is of pre-meditated arrangements to secure D.G. Sets of capacity higher than that was required for power production only to sell power so generated. The EOU has claimed and shown that for 14 months the entire electricity produced wa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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