Exemption for fuel in a 100% EOU supported waiver of pre-deposit and stay of recovery for power-generation inputs.

Notification No. 1/95 covers specified excisable goods used in a 100% EOU, including captive power plant equipment and fuel for captive generating sets, while Notification No. 57/94 also exempts fuel. On the stated facts, HSD oil and furnace oil were procured against CT-3 certificates and used to generate electricity for manufacture of export products. No material showed diversion of the fuel or use of the electricity for unrelated purposes. On that basis, a strong prima facie case was made out for waiver of pre-deposit, and stay of recovery was granted.

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Issues: Whether the applicants made out a prima facie case for waiver of pre-deposit and stay of recovery in respect of duty demanded on HSD Oil and Furnace Oil obtained for use in generation of electricity in a 100% E.O.U.

Analysis: Notification No. 1/95 exempts specified excisable goods brought in connection with the manufacture and packing of articles into a 100% E.O.U., and the annexure specifically includes captive power plant, including captive generating sets, and fuel for such plant and generating sets. Notification No. 57/94 also provides exemption for fuel. The applicants claimed that the oil was procured against CT-3 certificates and used for generation of electricity employed in manufacture of the exported final products. No evidence was produced to show that the fuel was used otherwise or that the generated electricity was diverted for unrelated purposes.

Conclusion: The applicants established a strong prima facie case for waiver of the entire pre-deposit and stay of recovery was granted.

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