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TMI Blog2023 (7) TMI 639X X X X Extracts X X X X X X X X Extracts X X X X ..... ation No 4/2006-E dated. 01.02.2006 and chargeable to CVD SAD at applicable rates. A perusal of Notification No. 4/2006-CE dated 01.03.2006 and Notification No. 20/2006-CUS dated 01.03.2006, clearly indicates that the exemption from CVD and SAD are available to Sulphur, only when they are used in the manufacture of fertilizer. Admittedly, the Appellant have sold 25165.450 MT of Sulphuric Acid in the market and hence the Sulphur content in the total quantity of sulphuric acid removed for the purposes other than for manufacture of fertilizer are not eligible for the exemption. The quantity of Sulphur in the Sulphuric Acid cleared to open market works out to 8304.265 MT, which accounts for 0.66% of the total import of Sulphur made by the Appellant - the Appellant are not eligible for the exemption of CVD and SAD provided under the above said Notifications, for the above said quantity of Sulphur cleared to domestic market. Extended period of limitation - suppression of facts - HELD THAT:- The Appellant has imported sulphur in bulk. At the time of importation of Sulphur they could not visualize how much quantity will be used in the manufacture of Sulphuric Acid and what quanti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent ORDER PER K. ANPAZHAKAN : The Appellant is engaged in the manufacturing and marketing of DAP/NPK Fertilizer, in their factory located at Paradeep, Odisha. The factory of the Appellant consists of Sulphuric Acid Plant, Phosphoric Acid Plant, Captive Power Plant and Di-Ammonia Phosphates (DAP) Plant. All the three plants are integrally connected to each other and involved in the process of manufacture of fertilizer. 2. The instant appeal was filed by the Appellant challenging the impugned order dated. 31.03.2016, imposing CVD SAD, on the quantity of imported Sulphur, which was not used in manufacture of fertilizer, invoking extended period of limitation, under Section 28 of the Customs Act, 1962 (in short the Act) and consequent imposition of penalty under Section 114A of the said Act. The Appellant also challenged confiscation of imported goods under Section 111(o) and imposition of redemption fine under Section 125 of the Act. 3. The dispute has arisen, consequent upon an investigation initiated by DRI, resulting in re-assessment of Bill of Entry, under which Sulphur was imported by the appellant for manufacture of fertilizer. Sulphur falling under Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tilizer, was only 0.66% (8304.265 MT) of the total sulphur imports, which is quite negligible. Sulphuric Acid was cleared from the factory on payment of appropriate duty of central excise, which was reflected in the monthly ER-1 return, filed by them under Rule 12 of the Excise Rules, 2002. 8. According to the department the Sulphur which was used in manufacture of fertilizers only qualifies for exemption, under Sl. No. 3 of Notification No 4/2006-E dated. 01.02.2006. But, the Sulphur used for the purposes other than manufacture of fertilizer or for manufacture of sulphuric acid sold in market, is not eligible for exemption and chargeable to CVD SAD at applicable rates. 9. The Appellant sated that they have fulfilled the requirement of the said Notification, in as much as, the goods imported, were procured for manufacture of fertilizer. The intended use , was only for manufacture of fertilizer and a small quantity, was sold to outside customers, which constitute only 0.66% (8304.265 MT) of the total sulphur imports. In support of the stand regarding the expression for use means intended to use as incorporated in the notification, the Appellant relied on the decision on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 28(4) can be invoked for recovery of duties not levied or short levied, on account of suppression of fact, willful mis-statement, fraud, collusion etc., on the part of the importer. Similarly, penal provision under Section 114A can be invoked, where the above ingredients are present. However, in the present case, at the time of importation of Sulphur by the Appellant in bulk, it cannot be visualized / ascertained, as to how much quantity, will be used in manufacture of Sulphuric Acid, cleared in the domestic market, so that duty on such quantity of Sulphur would be paid by the Appellant. Therefore, the entire quantity of imported Sulpur was taken clearance at Nil rat of duty. Due to storage and other constraints, the Appellant was compelled to clear Sulphuric Acid, in the domestic market. The said clearance of Sulphuric Acid, were made under the cover of excise invoices, on payment of appropriate central excise duty. In such a situation, no charge of suppression or willful mis-statement and fraud etc., can be alleged against the Appellant, accordingly extended period of limitation cannot be invoked in this case. 15. The Ld. A.R. reiterated the findings of the adjudicating au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present case on hand, since the exemption in this case is applicable only when the Sulphur imported is actually used in the manufacture of fertilizer. Since, the Appellant themselves admitted that the said 25165.450 MT of Sulphuric acid has been cleared to open market, there is no dispute that 8304.265 MT of Sulphur imported was not used in the manufacture of fertilizer. Hence, we observe that the decisions cited by the Appellant are not relevant to this case. 20. Regarding invocation of extended period, the Appellant stated that the extended period of limitation in terms of Section 28(4) cannot be be invoked for recovery of duties not levied or short levied, as there was no suppression of fact, willful mis-statement, fraud, collusion etc., on the part of the assessee. Similarly, penal provision under Section 114A also cannot be invoked, as the ingredients required for invoking the section are not present in this case. We observe that the Appellant has imported sulphur in bulk. At the time of importation of Sulphur they could not visualize how much quantity will be used in the manufacture of Sulphuric Acid and what quantity will be cleared in the domestic market. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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