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TMI Blog2006 (11) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... tal officers, Show Cause Notice dated 11-2-2005 was issued on the ground that the appellants had violated the conditions of the relevant Notifications by transferring power to the DTA without permission from the concerned authorities. There was a proposal for demand of the duty on the DG sets, their confiscation and imposition of penalties. On conclusion of the adjudication proceedings, the Commissioner passed the impugned order. The order portion of the impugned OIO is reproduced herein below:- ORDER (a) I hold that the said diesel generating sets are ineligible for the benefit of exemption under Notification No. 53/97-Cus. dated 3-6-1997, which was extended to M/s. Toyota Kirloskar Auto Parts Private Limited at the time of import. (b) I order confiscation of the said three diesel generating sets totally valued at Rs. 11,18,01,269/-, imported under Bills of entry Nos. 455311 dated 10-1-2003 and 459225 dated 27-1-2003, under Section 111(o) of the Customs Act, 1962. However, I give an option to M/s. Toyota Kirloskar Auto Parts Private Limited to redeem the same on payment of nominal fine of Rs. 25,00,000/- (Rupees Twenty five lakhs only) in lieu of confiscation as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wherein it is held that when there is delay of statutory authorities in granting a certificate of essentiality, which is not attributable to the party, and depends on the acts of public functionaries, that would not disentitle a party to the benefit of a notification. Actually here is no sale of power by the appellant because the power was only transferred to their own DTA. The Notifications in question have not been violated since necessary correspondence has been carried on with the Electricity department and the Customs authorities. 4.1Since the transfer of power by the appellant to their own DTA does not amount to sale, the question of paying any duty on the raw material does not arise read with the decision of the Tribunal in Indian Railways (Wheel Axle Plant) v. CCE, Bangalore - 2004 (116) ECR 733 (Tri.-Bang.) and Wheel Axle Plant v. CCE, Bangalore-II - 2003 (161) E.L.T. 843 (Tri.-Bang.) 4.2The appellants have not imported or obtained any duty free raw material. Duty liability does not arise at all under the subject Notification. The DG sets are bonded goods still lying in the Private Bonded Warehouse and according to the decisions of the Supreme Court in the cases o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned order has been served after 240 days of passing the order. 4.10The respondent has illegally exacted and appropriated Rs. 5.68 crores collected even before the Show Cause Notice was issued (paid under protest by the appellant) and this sum is liable to be refunded with statutory interest as held by the Apex Court in Kuil Fireworks v. UOI - 1997 (95) E.L.T. 3 (S.C.) and Sandvik Asia Ltd. v. CIT - 2006 (196) E.L.T. 257 (S.C.). 4.11The learned Advocates referred to the Supreme Court decision in the case of Sir Kikabhai Premchand v. CIT - 1953 (24) ITR 506 (S.C.) and contended that no one can do business with himself. There can be no sale by a person to himself. The expression 'sale' involves two distinct persons as held by the Apex Court in various decisions. 5.The learned JDR reiterated the impugned order. 6.We have gone through the records of the case carefully. The appellants imported 3 DG sets for generation of power under the EOU Scheme, free of duty vide Notification No. 65/2002-Cus. dated 24-6-2002. This Notification was amended by Notification No. 52/2003-Cus. dated 31-3-2003. Both the Notifications contained similar conditions with regard to the sale/transfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the Board of Approvals. The correspondences reveal all the efforts taken by the appellant to obtain NOC both from the Development Commissioner, and also the Electricity Authorities. The chronology of the events is given below:- Date Event 29-4-2002 Application to set up EOU addressed to the CSEZ 3-5-2002 Permission granted to set up EOU by CSEZ 12-10-2002 Application for license to operate private bonded warehouse 27-11-2002 Letter sent to Deputy Commissioner of Customs, EOU informing that order was placed for three DG Sets (import proposed) and their intention to transfer the surplus power to DTA 10-1-2003 27-1-2003 Three numbers of DG Sets imported from Finland , Wartsila through Chennai Port and installed. 28-3-2003 Goods bonded under B-17 bond at EOU premises. 26-2-2003 Correspondence with Electricity authorities of Government of Karnataka for approval of drawings. 25-8-2003 Letter to Chief Electrical Inspector to Govt., of Karnataka seeking permission to transfer power fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the Commissioner that the appellant had violated the conditions of the Notification. It has been held that by the Apex Court in the Tullow India Operations case, cited supra, that delay of statutory authorities in granting a certificate of essentiality, which is not attributable to the party, would not dis-entitle a party to the benefit of a Notification. In the present case, the Commissioner has dealt with the issue as though he were dealing with a criminal act. That is why he has used the words 'preparation' 'attempt' and 'actual commission of offence'. In the context of the commission of a criminal offence one refers to 'intention' or a 'guilty mind'. In the present case, the intention has a different connotation. The intention as far as the letter 27-11-2002 is, not an intention to commit any criminal offence but only an intention to transfer surplus power to DTA. Para 8 of the relevant notification requires that the appellant takes the permission of the Electricity Board authorities and also the Development Commissioner in order to (a) sell power into Domestic Tariff Area; (b) Transfer power to other export oriented undertaking or software technology park; In the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds over the rice to his daughter as a gift for the marriage festivities of her son." 6.2In fact, the surplus transfer will not be covered by sale. There is also no transfer of power to another EOU. Hence, the situation which has arisen here is only the appellant's use of power in his own DTA. In other words, this use amounts to captive consumption. Therefore, strictly speaking, there is no violation of conditions of para 8 at all. Assuming that it is covered by para 8, it is on record that the appellants had obtained permission from both the Electricity Board authorities and the Development Commissioner, CSEZ. The delay in obtaining the permission cannot be attributed to the appellants. Therefore, the benefit of Notification cannot be denied. 6.3Another point is that para 8 requires that in case of sale of surplus power, duty attributable to the consumables and raw materials for generation of power transferred should be paid. In the present case, it is on record that the appellants had actually used only duty paid consumables and raw materials for the generation of power. In these circumstances, there is no question of demanding any duty on the consumables and raw materials. D ..... X X X X Extracts X X X X X X X X Extracts X X X X
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