TaxTMI 
TaxTMI 
2023 (5) TMI 205
X X X X Extracts X X X X
X X X X Extracts X X X X
....ter from the nearby river to the beneficiation plant at Barbil as also to carry 'tailings' (i.e. iron ore waste) to a nearby tailings dam. 3. The pipelines spanning over 217KM, have been laid after obtaining right of way/lease/license over the land on which the pipelines were installed. For this purpose, the Appellant entered into contracts/obtained permissions from various parties who had rights over the land such as the Government of Odisha, East Coast Railways, private landowners, etc. Accordingly, the Appellant had the right of way/license over the entire land on which the pipelines were installed. This right of way/license was obtained at various points of time during 2007-2009 as and when the work of installation of pipelines was carried on. 4. As the Iron Pellets manufactured by the Appellant were to be exported, it applied for EPCG licenses in respect of the capital goods that were required for the pre-production, production and postproduction of such Iron Ore Pellets. The Appellant applied for four EPCG Licenses in respect of the Pipes required for movement of the concentrate from Barbil to Jajpur and for sourcing water from a nearby river for manufacture of concentrate ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion No.8 in the condition sheet to the EPCG licenses clearly specified the place of installation of the imported pipes to be Jajpur or Barbil, whereas the pipelines were installed outside these approved premises. It was held that the pipelines, not being installed in the approved factory or premises were not eligible for the concessional rate of Customs duty. The Appellant is before us against this OIO. 10. In their appeal, the Appellant made the following submissions:- (i) The Appellant submitted that the Barbil and Jajpur Plants constitute an integrated manufacturing unit of the Appellant and the pipeline connecting these two facilities would be considered to be within the factory itself for the purpose of claiming EPCG benefits. (ii) In this context, they placed reliance on the decision of the Hon'ble Supreme Court in the cases of Vikram Cements [2006 (194) ELT 3] and Madras Cements Ltd. [2015 (325) E. L. T. 239 (SC) wherein it was held that CENVAT Credit on inputs received and used in captive mines would be considered to be received in the factory and allowed if the said mines constitute an integrated unit together with the manufacturing facility. (iii) They further sub....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cumbent upon them to have filed an appeal against the decision of the Deputy Commissioner cancelling the Bank grarantee. It is a settled position in law that if an appealable order attains finality, the said decision cannot be challenged by way of separate proceedings, circumventing the appellate proceedings under the Act. In this regard they cited the decision of Flock (India) Pvt Ltd. reported at 2000 (12) E. L. T. 285 (SC)]. 16. The Appellant submitted that the EPCG Scheme envisaged an "actual user condition" which was defined in Chapter 9 of the FTP to mean a person who utilizes the imported goods for manufacture in his own "industrial unit". They submitted that the fact that Barbil and Jajpur constitute an integrated industrial unit for manufacture of Iron Ore pellets which are exported is not disputed and consequently, the benefit under the EPCG scheme cannot be denied to the Appellant. 17. They also submitted that the non-installation in the approved premises can be treated as a procedural lapse, so long as the substantive condition of manufacture of export products using the installed capital goods and consequent fulfillment of export obligation is fulfilled. Such a lapse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ting of beneficiation plant at Barbil, Odisha and pellets making facility at Jajpur, Odisha. The two Plants are located at a distance of 217 Kms. In the beneficiation Plant, at Barbil, the raw ore fines were processed and impurities were removed and converted into a concentrate. It is transported in a slurry form to the Pellet manufacturing Plant at Jajpur through pipeline. The pipes required for transporting the concentrate were imported under EPCG Scheme. 23. In the Notice, the Department alleged that the EPCG licenses specifies the place of installation of imported pipes as the factories at jajpur or Barbil, whereas the pipelines were installed outside the 'approved' premises. Accordingly, the Notice was issued to deny the benefit of concessional rate of Custom Duty. The Notice alleged that the conditions of Notification Nu.64/2008-Cus dated 09/05/2008 and Para 5.32 of the Handbook of Procedures of FTP stood violated in as much as the imported pipelines were not installed at the 'premises' mentioned in the EPCG licenses, which is the manufacturing premises/factory. 24. We find that the Department had inferred the Central Excise registered factories at Barbil and Jajpur as the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fferent from the location mentioned in the EPCG License. The Appellant explained their position and thereafter the DGFT issued EODCs for all EPCG licenses. Thus, we find that DGFT has accepted the Appellant's claim that the pipes were issued within the premises of the Appellant as required in the Notification 64/2008 Cus dated 09/05/2008. The EODCs were issued during the period January 2017 to April 2017. Consequent to the issuance of the EODCs by the DGFT, the Deputy Commissioner, Paradeep Customs Division, vide his letter dated 21.04.2017 cancelled and returned the bank guarantees given by the Appellant at the time of applying for the EPCG license. 27. Thus,we find that the EODCs were issued by the DGFT only after satisfying themselves that all the conditions specified in the Licence have been fulfilled. We also find that after issue of EODC, the Custom Department cancelled the Bond and bank guarantee executed by the Appellant. The Department has cancelled bond and bank guarantee after satisfying that the Export Obligation was fulfilled and EODC was produced and the Appellant has satisfied all the conditions of the Notification or the licence. Hence, we find that both DGFT and C....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the exemption provided under Notofication 64/2008 Cus dated 09/05/2008 cannot be denied. 31. The Appellant further submitted that the Hon'ble Supreme Court has in the case of Jaypee Reva Cement Vs. Commissioner reported in 2001 (133) E. L. T. 3 (SC) allowed Modvat Credit on explosives which were used in quarrying limestone used in the manufacture of cement. The use of Explosives was held as being used within the factory premises. This decision was also reiterated by Hon'ble Supreme Court in the case of Madras Cement Vs. Commissioner 2015 (325) ELT 239 (SC). 31. The Appellant also placed their reliance on the Supreme Court decision in the case of Birla Corporation Vs. Commissioner reported in 2005 (186) E. L. T. 266 (SC) which was followed in the case of Commissioner of Central Excise, Nagpur, Vs. Manikgarh Cement Ltd. reported in 2005 (190) ELT 7 (SC) wherein Modvat Credit on ropeway which connects mines with the factory was allowed as being in the nature of capital goods required for the manufacture of final product. The Appelant also referred the Tribunal decision in the case of Commissioner Vs. Pepsico India Holdings 2001 (130) ELT 193 (Tri) wherein PVC pipes used outside the....