TaxTMI 
TaxTMI 
2023 (7) TMI 639
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....Appellant consists of Sulphuric Acid Plant, Phosphoric Acid Plant, Captive Power Plant and Di-Ammonia Phosphates (DAP) Plant. All the three plants are integrally connected to each other and involved in the process of manufacture of fertilizer. 2. The instant appeal was filed by the Appellant challenging the impugned order dated. 31.03.2016, imposing CVD & SAD, on the quantity of imported Sulphur, which was not used in manufacture of fertilizer, invoking extended period of limitation, under Section 28 of the Customs Act, 1962 (in short the Act) and consequent imposition of penalty under Section 114A of the said Act. The Appellant also challenged confiscation of imported goods under Section 111(o) and imposition of redemption fine under Se....
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....CVD and SAD amounting to Rs.1,23,42,183/- along with interest under Section 28AB/28AA of the Act, besides imposition of equal amount of penalty, under Section 114A, along with redemption fine of Rs.2.00 crores, in lieu of confiscation under Section 125 of the Customs Act, 1962.The present appeal is against this impugned order. 6. In their submissions, the Appellant stated that imported Sulphur has been used in the manufacture of sulphuric acid, which is an intermediate product, for manufacture of fertilizer, the ultimate finished product. The entire imported quantities were stored in 4 nos. of Tanks from which the materials were continuously fed to the manufacturing process of fertilizer. However, at times under unforeseen situations lik....
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....e" means "intended to use" as incorporated in the notification, the Appellant relied on the decision on the case of State of Haryana Vs. Dalmia Dadri Cement Ltd. 2004 (178) ELT-13 (SC), wherein the Hon'ble Supreme Court has held that the phrase "for use" means "intended for use", and not actually used. The relevant extracts of the judgment is reproduced below:- "10. We are unable to accept the submission of Mr. Bana that, in order to get the exemption it must be show that the goods in question, namely, the cement supplied y the assessee in this case was actually used I the generation or distribution of electrical energy. It must be noted that the important words used in the relevant provisions are goods for use by it in the generat....
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....decided by the Hon'ble Supreme Court (Supra), the importer has rightly availed the exemption of CVD and SAD under the Notifications. 14. Regarding invocation of extended period, the Appellant stated that the extended period of limitation in terms of Section 28(4) can be invoked for recovery of duties not levied or short levied, on account of suppression of fact, willful mis-statement, fraud, collusion etc., on the part of the importer. Similarly, penal provision under Section 114A can be invoked, where the above ingredients are present. However, in the present case, at the time of importation of Sulphur by the Appellant in bulk, it cannot be visualized / ascertained, as to how much quantity, will be used in manufacture of Sulphuric Acid,....
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....phuric acid removed for the purposes other than for manufacture of fertilizer works out to 8304.265 MT, which accounts for 0.66% of the total import of Sulphur made by the Appellant. Hence, this quantity of Sulphur which was not used in manufacture of fertilizers does not qualify for the exemption, under Sl. No. 3 of Notification No 4/2006-E dated. 01.02.2006 and chargeable to CVD & SAD at applicable rates. 18. A perusal of Notification No. 4/2006-CE dated 01.03.2006 and Notification No. 20/2006-CUS dated 01.03.2006, clearly indicates that the exemption from CVD and SAD are available to Sulphur, only when they are used in the manufacture of fertilizer. Admittedly, the Appellant have sold 25165.450 MT of Sulphuric Acid in the market and h....
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....duties not levied or short levied, as there was no suppression of fact, willful mis-statement, fraud, collusion etc., on the part of the assessee. Similarly, penal provision under Section 114A also cannot be invoked, as the ingredients required for invoking the section are not present in this case. We observe that the Appellant has imported sulphur in bulk. At the time of importation of Sulphur they could not visualize how much quantity will be used in the manufacture of Sulphuric Acid and what quantity will be cleared in the domestic market. Therefore, the entire quantity of imported Sulphur was taken clearance at 'Nil' rat of duty. Due to storage and other constraints, they were compelled to clear some quantity of Sulphuric Acid in the do....