Court denies duty exemption on imported coal for captive power plant; plant didn't meet export criteria.

The Court ruled against the petitioner's claim for duty exemption on imported coal for a captive power plant, stating that the plant did not qualify as a 100% export-oriented undertaking approved by the Board. Despite allowing duty-free import of power generation equipment, the Court held that coal for power generation did not meet the criteria for duty exemption as a raw material or consumable for manufacturing charge-chrome. Consequently, the Court dismissed the writ application, denying the petitioner's request for duty exemption on imported coal.

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Issues:
1. Whether coal imported for a captive power plant is exempt from customs duties under a specific government notification for 100% export-oriented undertakings.

Analysis:
The petitioner set up a plant for manufacturing charge-chrome and ferro-chrome, with a captive power plant for electricity generation. The government resolution aimed at boosting exports provided concessions for 100% export-oriented units, exempting certain imports from customs duties. The petitioner argued that coal imported for the captive power plant should be considered a raw material or consumable for manufacturing charge-chrome, thus eligible for duty exemption under the notification.

The government approved the petitioner's 100% export-oriented undertaking and permitted the import of capital goods, including power generation equipment for the captive power plant. The petitioner contended that since the power generation equipment was allowed duty-free import, coal for the power plant should also be exempt. However, the Customs authorities argued that coal for power generation does not qualify as a raw material or consumable for manufacturing charge-chrome under the notification.

The Court held that the captive power plant was not considered a 100% export-oriented undertaking approved by the Board, thus not eligible for duty exemptions under the notification. While the power generation equipment was permitted duty-free import, coal for power generation did not meet the criteria for duty exemption as a raw material or consumable for manufacturing charge-chrome. Therefore, the Court dismissed the writ application, ruling against the petitioner's claim for duty exemption on imported coal for the captive power plant.

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