Tribunal grants appeal to Eurotex Industries on duty demand for diesel exemption

The Tribunal allowed the appeal in favor of M/s Eurotex Industries & Exports Ltd., a 100% EOU, regarding the duty demand on High Speed Diesel for their captive power plant. The Tribunal emphasized the exemption under Notification No. 59/99 for High Speed Diesel, exempting it from the additional duty imposed by Section 116 of the Finance Act, 1999. The impugned order was deemed unsustainable, highlighting the appellant's status and the exemption provisions. The judgment was issued on 15.09.2016.

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Issues:
- Demand of duty on High Speed Diesel imported for captive power plant
- Exemption under Notification No. 52/2003-Cus dated 31.3.2003
- Interpretation of Notification No. 59/99 dated 11.5.1999
- Benefit of exemption for 100% EOU
- Applicability of Tribunal decisions in Paras Fab International and I.C. Textiles Ltd.

Analysis:
The appeal pertains to M/s Eurotex Industries & Exports Ltd., an EOU, challenging the duty demand on High Speed Diesel imported for their captive power plant. The dispute revolves around the exemption under Notification No. 52/2003-Cus dated 31.3.2003, which does not specifically exempt the additional duty of Rs. 2/- per liter imposed by Section 116 of the Finance Act, 1999. The appellant contends that Notification No. 59/99 dated 11.5.1999 exempts the import of High Speed Diesel, citing the relevant provisions. The lower authorities denied the exemption, leading to the appeal before the Tribunal.

The appellant's counsel argued that the issue aligns with the Larger Bench decision in Paras Fab International and emphasized their status as a 100% EOU, relying on the observations in the said order. Additionally, reference was made to the Tribunal's decision in the case of I.C. Textiles Ltd. The Authorized Representative supported the impugned order.

Upon reviewing the submissions, the Tribunal examined the provisions related to warehousing and the EOU Scheme. Citing the Paras Fab International decision, it highlighted the requirements for 100% EOU premises as a bonded warehouse and the absence of duty payment obligations for goods used in manufacturing within the bonded premises. The Tribunal also referenced the I.C. Textiles case, emphasizing the exemption for goods moved into a 100% EOU. Furthermore, the Tribunal reiterated the exemption under Notification No. 59/99 for High Speed Diesel, exempting it from the additional duty levied under Section 116 of the Finance Act, 1999.

Consequently, the Tribunal concluded that the impugned order was unsustainable and allowed the appeal in favor of the appellant, emphasizing the exemption provisions and the status of the appellant as a 100% EOU. The judgment was pronounced on 15.09.2016.

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