TaxTMI 
TaxTMI 
2013 (9) TMI 387
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....riod Naphtha was a canalized item and could be imported through Indian Oil Corporation Limited (IOCL) only. As regards imports during the period from 1992 to 1997, the importation and subsequent utilisation by the assessee were viewed as in contravention of policy provisions during the relevant period and accordingly, proceedings were initiated and show cause notice was issued on 04.11.1996. 2. The matter is coming up before the Tribunal for the third time. The last order was passed by this Tribunal on 23.6.2010 with following observations/ directions:- 7. As is clear from the above the benefit has not been extended to the appellant on the sole ground that hey have failed to produce the documentary evidence showing usage of the product as fuel in their factory. As against above learned advocate has shown us a few certificates relating to some of the bills of entries, issued by the Superintendent indicating usage of the return stream as fuel. As such the only lapse on the part of the assessee remains that such certificates could not be placed by them before the original adjudicating authority. The assessees answer is that since the same were part of the proceedings in a conne....
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.... that the product is raw Naphtha, they were including a clause As Raw Naphtha in the bills of entries. It is his submission that this also supports the claim that appellant entertained a belief that Heptene and Nonene are under OGL and did not require any license during the policy period 1990-1992. Further, he also submits that the stand taken by Public Sector Companies that the specifications of raw Naphtha as per the Ministry of Petro-Chemicals would not cover the product imported by the appellant, would also show that Government departments had different parameters for different purposes and the clarification issued in 1981, which has not been retracted at any time later would also show that Heptene/ Nonene cannot be considered as Naphtha, as per the statutory authorities other than Customs. Since the policy restrictions are imposed by the Commerce Ministry and Commerce Ministry generally acts on the basis of Ministry of Petro-chemicals as well as Ministry of Finance, deliberate violation of policy prohibitions cannot be laid at the doors of the assessee especially in view of the fact that there is no allegation of mis-declaration of description of the goods by the assessee at....
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.... the full quantity of by-products as having been used as feed stock/ fuel. According to him, 31000.97 MT imported by the assessee could be accounted for as having not been used in terms of policy and accordingly, penalty was imposed. 8. As regards the facts, ongoing through the certificates, it was found that the certificates which have been prepared in respect of each and every bill of entry, show the total quantity imported and bye-products generated and used as fuel. The learned Commissioner totalled the quantity used as fuel and came to the conclusion that balance has not been used as per the policy. Learned counsel would rely upon the certificate issued by Superintendent of Central Excise, AR-III, Division-1, Baroda, wherein he has stated that the bye-product generated were utilised by the company for their captive use as fuel. The Superintendent also says that production and consumption of these by-products are duly recorded in RG-1 and clearances for captive consumption are after payment of Central Excise duty as applicable and issue of necessary invoices. Apparently, there is contradiction between two certificates. The certificate in respect of each bill of entry shows t....
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....legation to that effect is made, the benefit of doubt has to go to the assessee. More so in view of the fact that there is no rebuttal or rejection of claim by the assessee that they have used some quantity as by-product. Moreover, if the product is not Naphtha at all, the assessee has no obligation. 9. While making above observation, we take not of the following submissions of the learned Senior Counsel and consider that these decisions would apply to the facts of this case :- In Akbar Badruddin Jiwani vs. CC. 1990 (47) ELT 161, while dealing with liability to penalty under Section 112 (the Section was the same as sit is at present), the Hon'ble Supreme Court held (in Para 57) that the burden lies on the department to show that the appellant has acted dishonestly or contumaciously or with a deliberate or distinct object of breaching the law. In the case before the Hon'ble Supreme Court, since the appellant had a bonafide plea that the goods were importable under OGL, the Hon'ble Supreme Court considered whether the penalty and the fine in lieu of confiscation required to be quashed. After referring to its earlier decisions on the subject, the Hon'ble Supreme Court (in Para 5....