PML INDUSTRIES LTD. Vs. CCE

JUDGEMENT

(1.) Lest we should lose sight of the gravity of the case, we read the operative part of the adjudication order impugned in this appeal.

(2.) The proceedings culminating in the above order emanated from the allegation that appellant M/s. PML Industries Ltd. (PML), Patiala failed to meet its export obligation (as a 100% EOU) and that part of the goods manufactured was sold in the domestic tariff area.

(3.) Very briefly stated the facts of the case are that the appellant PML is an approved 100% EOU and it imported capital goods valued over Rs. 26 crores duty free and also obtained some domestically produced machinery (without payment of excise duty) subject to the obligation that it will export its product, namely, Boneless Buffallo Meat and bye -product. The appellant's efforts met with only obstacles, the very first being a ban on the appellant's production by the State Government of Punjab. Though the appellant got over the ban through judicial intervention, the ban undermined its capacity to raise finances and to run the unit. As a solution to this problem, appellant got into an arrangement with M/s. Agrico Foods Pvt. Ltd., M/s. Allana Investment and Trading Com and M/s. Frigario Conserva Allana Ltd., where under these firms procured the cattle for slaughtering, appellant carried out the processing, received processing charge and the meat products were supplied to these parties for export. However, the customs authorities issued a show cause notice alleging that the appellant had let out its plant (which it could not have done) and that the supplies to these parties was only in the nature of domestic sale and could not be counted against export obligation and that the export of the goods had not been proved etc. The Commissioner while passing the impugned order, held in favour of the Revenue, except with regard to the allegation of letting out the plant. Based on the findings, the Commissioner demanded the duties, imposed penalties and redemption fines as indicated earlier in this order.