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TMI Blog2013 (9) TMI 219X X X X Extracts X X X X X X X X Extracts X X X X ..... s quantity as consumed when compared to actual quantity consumed by submitting false End Use Certificate and thereby evaded Customs duty on suppressed quantity of Naphtha - Held that:- Confiscation and penalty was not justified in the case – thus confiscation of Naphtha and order for redemption fine and penalty imposed under Section 114 of Customs Act, 1962 were set aside - The appellants were not denying the duty was payable therefore, they have discharged the duty liability rightly - The appellants did not declared the correct quantity of the balance of unutilized Naphtha - Therefore, they were rightly liable to pay interest on the quantity which was not disclosed while furnishing End Use Certificate - Hence the order of appropriating int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the year 2006-08 they filed 13 Bills of Entry and imported 388542.793 MT of Naptha. The Bills of Entry were assessed provisionally. Vide their letter dated 3.09.2007, they submitted End Use Certification for the period 20.11.2006 to 31.05.2007 and out of total imported quantity of 388542.793 they had consumed 380946 MT Naphtha resulting in a closing balance of 8050 MT of Naphtha lying unutilized. The Jurisdictional Asst. Commissioner vide Order dated 26.10.2010 confirmed the duty of Rs. 7,92,27,276/- along with interest by disallowing the aforesaid exemption notification. The appellant challenged the order before the learned Commissioner (Appeals). The learned Commissioner (Appeals) vide order No. GOA/CUS/GSK13/2011 dated 21.02.2011 dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s as per actual consumption basis, whereas the consumption statement/End Use Certificate was based on Central Electricity Regulatory Commission's (CERC) guidelines instead of actual consumption and now they have reconciled the availability of Naphtha and found that there was more quantity of Naptha than declared in the end use certificate dated 11.07.2011. Since the appellant failed to declare the actual quantity of Naphtha in the end use certificate, the excess quantity of 34696.73 MT was detained. The appellant discharged customs duty of Rs. 30,64,41,616 along with interest of Rs. 16,46,15,787/- ( excluding 8050 MT on which they have also discharged customs duty and interest vide Challan No.03 dated 11.7.2011). Accordingly, the department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mported naphtha should have been actually used in the generation of electricity. The Hon'ble Supreme Court, in various decisions has construed the expression for use as intended for use and not actual use . The contention of the appelan tis that the intention to use the imported naphtha for generation of electricity is proved well beyond doubt in the present case in as much as out of total quantity of 388542.79 MTs, the appellants have utilized 357353.2 MTs for generation of electricity. The balance quantity of naphtha is still lying with the appellants. Hence, the intention and actual use have been proved beyond doubt. The balance quantity not being used for generation of electricity and it being proposed to be sold, the exemption und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey have also paid 25% of the penalty. The contention is that they have not mis-declared the quantity with intention to evade duty. The appellants have submitted that the consumption statement of naphtha with consumption worked out as required by the Electricity Act, 1963 and based on the norms provided by the Central Electricity Regulatory Commission (CERC). The contention is that interest is not payable in the present case since duty cannot be demanded under Section 28 of the Customs Act. 3.1 The contention of the appellants is that on importation, the importer is required to file Bill of Entry for home consumption under Section 46(1) of the Act. The goods are inspected/examined and thereafter assessed by the proper officer in terms of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entire quantity of naphtha lying unutilized. The jurisdictional Asst. Commissioner demanded duty for the said quantity. The learned Commissioner (Appeals) vide his order dated 21.02.2011 ordered the appellant to either to utilize the balance quantity of Naphtha or dispose it off as per law. On the basis of further information supplied by the appellant and the basis of survey carried out it was found that 33950 MT of Naphtha was not accounted besides 8050 MT of Naphtha already reported. It is also not in dispute that the appellants have at no stage removed or made an attempt to remove the quantity disclosed at the initial stage and the quantity ascertained subsequently. However, the department confiscated the goods under Section 111(o) whic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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