AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2015 (10) TMI 418
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....85. The said unit was purchased by the appellants from M/s. Asian Peroxides Ltd., Kotapolur, Nellore District (APL) another 100% EOU engaged in the manufacture of Sodium Perborate and Hydrogen Perborate. 2. APL had three units, Unit I is a DTA unit engaged in the manufacture of Hydrogen Peroxide, Unit-II is a 100% EOU engaged in the manufacture of Hydrogen Perborate and Unit-III is also an 100% EOU engaged in the manufacture of Sodium Perborate. The present dispute is related to Unit-III of APL which was later on acquired on outright purchase by the appellants. 2.1 The appellant was given Letter of Permission (LOP) for manufacture and export of 1200 metric tonne of Sodium Perborate per annum with value addition of 26%. Export obligati....
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....the duty foregone on imported/indigenously procured raw materials and capital goods culminating in the impugned order whereby it was held that appellants have failed to fulfill the obligation caste on them as per the Notifications under which raw materials/capital goods were procured and consequently it was held that appellant was liable to pay duty of Rs. 5,21,27,308/-. Penalty of Rs. 2,40,10,000/- was imposed and redemption fine of Rs. 1.5 crores was ordered to be paid. 3. Learned counsel on behalf of the appellants took us through the facts which have been briefly discussed above. It was submitted that the Notifications under which the capital goods were imported did not require the appellants to make payment of duty with interest on ....
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....d that the Commissioner has not considered many important submissions at all. 3.1 The Commissioner had observed that the capital goods had not been utilized or installed and this was factually incorrect. It was submitted that appellants had exported Sodium Perborate in the first 3 years viz., 1997-98, 1998-99 and 1999-2000 and because of adverse market condition, they had to stop export of Sodium Perborate thereafter. 3.2 The Commissioner did not take note of the fact that Development Commissioner on 25.11.2003 had permitted to fulfill the obligation cast on them by exporting Hydrogen Peroxide without any additional capital goods procured either by import or local capital goods. Therefore the capital goods which were already installed....
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....rtaken are stabilization, stirring and packing of Hydrogen Peroxide only and no new product with distinct name and character emerges. According to Foreign Trade Policy, manufacture is defined as under: "Manufacture" means to make, produce, fabricate, assemble, process or bring into existence, by hand or by machine, a new product having a distinctive name, character or use and shall include processes such as refrigeration, re-packing, polishing, labeling, reconditioning, repair, remaking, refurbishing, testing, calibration, re-engineering. "Manufacture", for the purpose of this Policy, shall also include agriculture, aquaculture, animal husbandry, floriculture, horticulture, pisciculture, poultry, sericulture, viticulture and mining." ....
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....hieved by exporting hydrogen peroxide which was not actually manufactured by the assessees by using the duty free capital goods but by procuring it from their sister concern M/s. Asian Peroxides Ltd. Plant-I under CT-3 procedure and by doing end processes of stabilization, stirring and packing only. By now it is clear that the assessees have not utilized the duty free capital goods and raw materials for the manufacture of neither sodium perborate nor hydrogen peroxide but earned positive NFE by procuring the said product from their sister concern under CT-3 and exporting the same by doing end processes of stabilization, stirring and packing and thus violated the conditions of the Notifications, Bond, LOP and Legal Agreement and thereby are ....
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.... the periods from 1997-2001 and the obligations that arise because of the failure and period from 2003-2007. Whether such exercise is required or not, also has not been considered. As regards the period from 1997-2002 there is a conclusion of the Development Commissioner that appellants have not fulfilled the obligation. For subsequent period, he has even allowed them to exit the scheme. The Commissioner has also not examined the claim of the appellant that process of stabilization, stirring and packing is covered by the definition of manufacture. To be fair, it has to be stated that during the time the order was passed, the decisions taking such a view were not available. 4.5 In paragraph 43, the Commissioner has considered the alternat....