I.G. PETROCHEMICALS LTD., Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) ALL the three appeals are being disposed of by a common order as they arise out of the same impugned order passed by Commissioner of Central Excise vide which:

(2.) WE have heard Shri J.J. Bhat Ld. Sr. Advocate appearing for the appellants and Shri P.K. Katiyar Ld. SDR for the Revenue.

(3.) M /s. I.G. Petrochemicals Ltd. is a 100% EOU engaged in the manufacture of 'Pthalic Anhydride', for which they possess requisite permission and licences from the appropriate authorities. The appellants are having two plant PA -I and PA -II for the manufacture of the said product and had imported turbine generator sets and diesel generator sets for captive power generation. One generator is connected to PA -I and the other is connected to PA -II. The dispute in the present appeal relates to duty free import of third generator in the year 1996 in terms of Notification No. 13/81 -Cus. superceded by Notification No. 53/97 -Cus. dt. 1.3.97. The said notifications permit duty free import of the capital goods for the purpose of manufacture of articles for export out of India, or for being used in connection with the production or packaging or job work for export of goods out of India by 100% EOU, subject to fulfillment of conditions enumerated therein. Inasmuch as, the appellant was having sufficient power generator plant, required for manufacture of final product, Revenue's view is that the third generator set imported by them, by availing the benefit of exemption notification in question, was not meant for use in the manufacture of articles for export out of India. As such, investigations were started against appellant No. 1 and statements of their authorized representatives were recorded. The result of such investigation revealed that the electricity generated out of the said generator set was being sold by the appellant in DTA to Maharashtra State Electricity Board, under an agreement. As such, Revenue entertained a view that inasmuch as the generator set in question was not being used in connection with the production of goods, to be exported, benefit of exemption from Customs Duty in terms of the notifications in question was not available. Similarly, the exemption in respect of indigenously procured goods, in terms of Notification No. 1/95 -CEX was also wrongly availed. Accordingly, show cause notice dt. 22.3.2002 was issued to the appellants herein proposing confirmation of demand of duty and imposition of penalties. The said show cause notice stands adjudicated by the Commissioner vide his impugned order.