TaxTMI 
TaxTMI 
TaxTMI 
2013 (9) TMI 219
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...., 1975 by availing benefit of Notification NO. 21/2002 Cus. dated 01.03.2002 as amended. Naphtha is allowed to be imported duty free for the generation of electricity. During the year 2006-08 they filed 13 Bills of Entry and imported 388542.793 MT of Naptha. The Bills of Entry were assessed provisionally. Vide their letter dated 3.09.2007, they submitted End Use Certification for the period 20.11.2006 to 31.05.2007 and out of total imported quantity of 388542.793 they had consumed 380946 MT Naphtha resulting in a closing balance of 8050 MT of Naphtha lying unutilized. The Jurisdictional Asst. Commissioner vide Order dated 26.10.2010 confirmed the duty of Rs. 7,92,27,276/- along with interest by disallowing the aforesaid exemption notificati....
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....y statement of Shri Mahesh Prasad was recorded under Section 108 of the Customs Act, 1962 wherein he stated that the closing stock of Naphtha shown in the Balance Sheet was as per actual consumption basis, whereas the consumption statement/End Use Certificate was based on Central Electricity Regulatory Commission's (CERC) guidelines instead of actual consumption and now they have reconciled the availability of Naphtha and found that there was more quantity of Naptha than declared in the end use certificate dated 11.07.2011. Since the appellant failed to declare the actual quantity of Naphtha in the end use certificate, the excess quantity of 34696.73 MT was detained. The appellant discharged customs duty of Rs. 30,64,41,616 along with inter....
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....ricity in their plants, from basic customs duty as well as CVD. The expression "for use" employed in the said notification does not mean that the entire quantity of the imported naphtha should have been actually used in the generation of electricity. The Hon'ble Supreme Court, in various decisions has construed the expression "for use" as "intended for use" and not "actual use". The contention of the appelan tis that the intention to use the imported naphtha for generation of electricity is proved well beyond doubt in the present case in as much as out of total quantity of 388542.79 MTs, the appellants have utilized 357353.2 MTs for generation of electricity. The balance quantity of naphtha is still lying with the appellants. Hence, the int....
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....ts are liable to pay duty only at the time of actual sale of imported Naphtha and not before that. The contention is that the appellants had paid duty and interest and they have also paid 25% of the penalty. The contention is that they have not mis-declared the quantity with intention to evade duty. The appellants have submitted that the consumption statement of naphtha with consumption worked out as required by the Electricity Act, 1963 and based on the norms provided by the Central Electricity Regulatory Commission (CERC). The contention is that interest is not payable in the present case since duty cannot be demanded under Section 28 of the Customs Act. 3.1 The contention of the appellants is that on importation, the importer is require....
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.... importing naphtha for generation of electricity on nil rate of duty in terms of Notification NO. 21/2002-Cus as amended. However, the appellants could not utilize the entire quantity of naphtha lying unutilized. The jurisdictional Asst. Commissioner demanded duty for the said quantity. The learned Commissioner (Appeals) vide his order dated 21.02.2011 ordered the appellant to either to utilize the balance quantity of Naphtha or dispose it off as per law. On the basis of further information supplied by the appellant and the basis of survey carried out it was found that 33950 MT of Naphtha was not accounted besides 8050 MT of Naphtha already reported. It is also not in dispute that the appellants have at no stage removed or made an attempt t....