9911796707
TMI Blog2014 (9) TMI 327X X X X Extracts X X X X X X X X Extracts X X X X ..... Companies Act, 1956, having its registered office at Hotel Polo Towers, Polo Grounds, Oakland Road, Shillong. The petitioner-company is a wholly owned subsidiary of Lafarge Surma Cement Ltd., a public limited company incorporated under the laws of Bangladesh. M/s. Lafarge Surma Cement Ltd. (for short LSC) has set up an integrated cement manufacturing unit at Chhatak in District Sunamgonj of Bangladesh as there is no limestone available in Bangladesh. Limestone and shale required for manufacture of cement by LSC in its cement plant are extracted from the mines located at Nongtrai and Shella Villages in the State of Meghalaya, which is the only source of raw material for the cement plant in Bangladesh. The distance between cement plant in Chhatak, Bangladesh and mines in Meghalaya (India) is about 17 kilometers. The petitioner-company which holds mining leases, extracts limestone and shale from the mines, crushes and processes the limestone and exports the same to the cement plant of LSC in Bangladesh by a 17 kilometers long elevated belt conveyor (for short LEBC). Though the two establishments are physically located in two different countries, but the cement plant in Bangladesh, min ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner, FSEZ, Kolkata communicated the grant of approval by the Government of India. The Board of Approval was the competent authority to grant the Letter of Permission (for short LOP), which issued letter dated 16-10-2002 as a 100% export oriented unit for production of export of limestone (for manufacturing cement) for the entire premises comprising the entire project in India i.e. mining area, crusher and crushing area and long conveyor belt system extending right up to the Indian Border. It is further pleaded by the writ petitioner that it executed an agreement dated 14-10-2003 with Development Commissioner, and in terms of letter of permission read with the agreement, petitioner was entitled to import/purchase indigenous plant and machinery, raw materials, components, spares and consumables free of customs/central excise duty as specified in the agreement. 5. It is also pleaded in the writ petition that pursuant to facility/exemption granted by the Board of Approval as mentioned above, the writ petitioner made substantial investment which included capital cost of long belt conveyor system. The process of importation commenced in November, 2003, including the long belt c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s approved by the Development Commissioner were not included, and long belt conveyor system (in India) was excluded. On this, the writ petitioner made a representation on 22-4-2004 to Commissioner of Central Excise, Shillong to grant excise registration in respect of the entire premises of EOU (including long conveyor belt system) and issuance of CT-3 Forms. In reply to this, the Deputy Commissioner, Central Excise, Shillong and Addl. Commissioner, Technical, Central Excise, Shillong vide letters dated 30-4-2004 and 6-5-2004 denied issuance of CT-3 Form for procurement of material for construction of long belt conveyor system (in India) on the ground that said conveyor would be used for the purpose of transportation of crush limestone and shale to Bangladesh for which duty free procurement under the aforesaid notification is not permitted. This made writ petitioner to seek clarification from Development Commissioner, Kolkata, for which it wrote letter dated 13-5-2004 regarding the fact that the integrated manufacturing process is being conducted right up to the Indian border as a single EOU premises. The matter was referred to the Board of Approval (BOA) by the Development Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not available as BOA has amended its earlier decision. (iv) The decision taken as referred to in letter dated 28-10-2002 and reference thereto in letter dated 25-7-2005 is contrary to the principles of natural justice and passed without affording opportunity of being heard in the facts and circumstances of the present case. (v) Without analysis of other points for considerations, the impugned order has been passed behind the back of the company and therefore is set aside and writ petition is accordingly allowed." It appears that Union of India challenged the aforesaid order by filing WA No. 31(SH) 2007 before the Division Bench of the Gauhati High Court which was heard and disposed of vide order dated 5-3-2008, which shows that the Union of India and its authorities withdrew the writ appeal with opportunity to pass fresh order by giving reasonable opportunity of being heard to the petitioner-company. The order passed in WA No. 31(SH) 2007 reads as under : "5-3-2008 Heard Mr D. Choudhury, learned Central Government Counsel (for short CGC) representing the Union of India/appellants as well as Mr. S.P. Sharma, learned counsel representin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adings, the writ petitioner sought quashing of the communication dated 6-1-2009 issued by the Development Commissioner, FSEZ, Kolkata and decision of Board of Directors in its meeting held on 23-7-2004. It is also submitted that on the basis of principle of promissory estoppel, the writ petitioner who has made huge investment, facility given to him cannot be withdrawn to his disadvantage. 9. The appellants (respondents before learned single Judge) contested the writ petition and filed their counter affidavits in which it is pleaded that even if the mining of limestone and crushing units located in India, and cement manufacturing unit located in Bangladesh are connected by 17 kilometers long belt conveyor system, the rules relating to Customs, Central Excise Act, etc. are operational to the units located in the respective countries. It is further stated in the counter affidavits that if the conveyor belt system for seven long kilometers in India is declared as area for which exemption is granted, it will be ultra vires to the Central Excise Act and Customs Act. It is also pleaded by the appellants in their counter affidavits filed before the learned single Judge that the Gover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adesh and another in India. In this connection, we would like to quote the letter dated 29-11-2000 written by High Commissioner of People's Republic of Bangladesh, New Delhi to the Foreign Secretary of Government, Republic of India. Said document is annexed A1 on the record which reads as under : "HIGH COMMISSIONER FOR THE PEOPLE'S REPUBLIC OF BANGLADESH NEW DELHI COMMISSIONER No. 01.20.31.2000 29 November, 2009 Excellency, I have the honour to refer to the proposed cross-border cement manufacturing project being set up by Lafarge Surma Cement Ltd. of Bangladesh and Lum Mawshun Pvt. Ltd. and Lafarge Umium Mining Pvt. Ltd. of India. The project involves mining operations in a quarry located in the State of Meghalaya in India and the export of limestone and shale to the cement plant in Bangladesh. The Government of India and the Government of Bangladesh confirm that they shall, upon application by the relevant parties and subject to compliance with necessary conditions and regulatory requirements as may be specified from time to time, cause to be granted of such consent, clearances and approvals within the existing legal framework, as are necessary for : (a) &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cessary for : (a) Installation of a continuous elevated conveyor belt linking the mines in India and the cement plant in Bangladesh across a portion of restricted border area and its uninterrupted operation for transportation of limestone and shale from the mines to the cement plant. (b) Facilities and permission for convenient border crossing and re-crossing for the personnel required to cross the India-Bangladesh border at a location to be mutually agreed upon, during construction and operation of the project. (c) Setting up of a Customs and Immigration post to be conveniently located in an area to be mutually agreed upon at the cost of Lafarge surma Cement Ltd. The Government of India and the Government of Bangladesh look forward to the early implementation of the project as a milestone of the excellent relations and close economic cooperation between our two friendly neighbouring countries. I would be grateful if Your Excellency could confirm that the above rightly sets out the understanding reached between our two Governments. I have the honour to confirm that the above correctly sets out the underst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hinery, components, spares, raw materials and consumables without payment of duty and for the purpose of manufacture of articles in the premises specified below for export out of India, by the said 100% Export Oriented Unit, approved by the Development Commissioner, Falta Special Economic Zone, Kolkata, in terms of Notification No. 53/97-Cus., dated 3-6-1997 as amended from time to time, subject to the conditions as set out. Description of the premises [declared as Warehousing Station by Commissioner of Customs (Preventive), NER, Shillong vide Notification No. 3/2004-Cus. (N.T.), dated 19-5-2004 under Section 9 of the Customs Act, 1962] 1. The 100 hectares of Limestone Mining Area as detailed in approved ground plan, bounded as follows : (a) North (1000 metres) Ka Risenf u Kyrnah (Elaka Nongtrai). (b) South (1000 metres) Ka Risenf u Kyrnah (Elaka Nongtrai) (c) East (1000 metres) Ka Risenf u Kyrnah (Elaka Nongtrai) (d) West (1000 metres) Ka Risenf u Kyrnah (Elaka Nongtrai) 2. The 7.6 hectares of land for crushi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n for duty Free procurement of conveyor belt system. Sir, In pursuance of the request of M/s. Lafarge Umiam Pvt. Ltd holding LOP No. 2(1)L-2/2002/7064, dated 16-10-2002 for duty free procurement of conveyor belt system for their 100% EOU, I am directed to send herewith extract of the minutes of the BOA meeting on 31-5-2004 under the Chairmanship of Shri G.K. Pillai, Additional Secretary, Ministry of Commerce & Industry, New Delhi. Yours faithfully, Sd/- (Ms. A.Dhar) Asst.Development Commissioner CASES REQUIRING BOA APPROVAL 2.1 Request of M/s. Lafarge Umiam Pvt. Ltd. - Permission for duty free procurement of Capital goods, Raw Materials for making CG, etc. The Board decided to approve the procurement of conveyer belt for the unit as capital goods liable for duty free import, keeping in view the fact it is the composite cement plant with units both in India and Bangladesh and is part of a joint collaboration between India and Bangladesh. (Action : FSEZ)" 16. It is not disputed that after the above mentioned approval communicated to the writ petitioner, the writ petitioner made investment in crores with regard to long conveyor belt. It is in this light, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound for excluding locomotives and motor vehicles used in carrying finished products from the factory". 19. Also in Vikram Cement v. Commissioner of Central Excise, Indore, 2006 (197) E.L.T. 145 (S.C.), the Apex Court has held that : "If mines are captive mines so that they constitute one integrated unit together with the concerned cement factory, Modvat/Cenvat credit on capital goods available-If mines are not captive mines but they supply to various other cement factories of different assesses, Modvat/Cenvat credit on capital goods used will be available to the assessee." 20. In paras 12 and 13 of Collector of Central Excise v. Rajasthan State Chemical Works, 1991 (55) E.L.T. 444 (S.C.), the Apex Court has made following observations : "12. Manufacture thus involves series of processes. Process in manufacture or in relation to manufacture implies not only the production but the various stages through which the raw materials are subjected to change by different operations. It is the cumulative effect of the various processes to which the raw materials is subjected to, manufactured product emerges. Therefore, each step towards such production would be a process i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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