TaxTMI 
TaxTMI 
2026 (6) TMI 1295
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....cts mentioned in their permission letter dated 21.05.1983. They procured the customs private bonded warehouse licence for import of capital goods and these capital goods will be used for quarrying operations in the mines situated at Bala Kundi (Karnataka). It is the case of the Revenue that appellant was registered in Tamil Nadu for manufacture of various granite products which were to be exported. As per Notification No.13/81-Cus. dated 9th February 1981, customs duties were exempted during the relevant period only if the manufacturing operations were carried out in customs bonded warehouse and the imported goods were to be used only for the manufacture of those articles that were to be exported. Since the capital goods were utilised for excavation of granite blocks in their quarry at a place different from their manufacturing activities, it was alleged that they had violated the conditions of the Notification and accordingly, demanded duty on both the goods imported and the goods which were procured indigenously. The Commissioner confirmed the duty amount of Rs.6,86,40,148/- under the Customs Act, 1962 and Rs.1,22,25,245/- under the Central Excise Act, 1944. Aggrieved by this ord....
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....t of permission from the Assistant Commissioner of Customs, Madras vide the letter dated 30.04.1986. The officers vide letter dated 30.12.1986 also acknowledged receipt of the transferred goods at R.S. No. 293/1B/1, Balakundi Village. The appellant regularly submitted details in Form ER-2 to the jurisdictional Departmental Authorities vis-à-vis the duty-free imports and procurement of goods, export performance, details of inter-unit transfers from Tamil Nadu as well as DTA clearances, if any. At the quarrying site at Balakundi Village, the appellant utilized the duty-free capital goods and consumables to excavate granite blocks, which were used for manufacture of granite articles. The appellant shifted the procured capital goods such as cranes and drills from the main unit at Tamil Nadu to the quarrying site at R.S. No. 293/1B/1, Balakundi Village under bond for manufacturing purposes in terms of Form CT-3 issued by the respective authorities and also vide letter dated 11.01.1993 were permitted to receive the same in the quarry site at Balakundi Village in relation to the manufacturing activities. At Balakundi Village, the quarried granite blocks were trimmed and dimensional....
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....ces which can be obtained from the earth by mining and inter alia quarrying. Therefore, since mining includes the activities of excavation for the purpose of obtaining minerals, which are substances that can be obtained from the earth by the processes such as quarrying, the capital goods used for quarrying can be considered as a part of their manufacturing activities. 3.4. Relying on the Circular No.45/1990-CX3 dated 27.08.1990 wherein it was clarified that a quarry was a mine and that quarried products were mining products hence the activity of quarrying granite undertaken at Balakundi Village (which was included in the LOP as an additional location for manufacture of granite slabs) was well within the scope of 'manufacture' for the purposes of the EOU scheme. Thus, the duty-free imported and indigenously procured goods were correctly utilised and they did not violate any conditions of the Notification 13/81-Cus. /123/81-C.E. it is submitted that the entire objective of including the quarry site at Balakundi Village as an additional location in the LOP was to facilitate access to raw materials viz. granite, without which the polished or processed granite slabs could not have be....
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....ufacture of cement/clinkers within a factory situated at some distance away from the mines could not be denied on the ground that they were not used as inputs within the factory. Further relied on the following decisions: • Union of India v. Hindustan Zinc Ltd., 2002 (142) E.L.T. 289 (Raj.), • Kudremukh Iron Ore Ltd. v. Collector of Customs, 2000 (121) E.L.T. 769 (Tribunal-LB) • GE India Technology Centre v. Commissioner of Customs, 2009 (247) E.L.T. 402 (Tri.-Bang.) • Vithat Grape Growers Co-Op Soc. Ltd. v. Commissioner of Central Excise, 2005 (187) E.L.T. 258 (Tri.-Mumbai) • Indian Charge Chrome Ltd. v. Commissioner of Central Excise, 2008 (228) E.L.T. 55 (Tri.-Kolkata) • Delstar Pvt. ltd. v. Commissioner of Central Excise, 2010 (259) E.L.T. 244 (Tri.-Mumbai) • Nitin Spinners Limited v. CESTAT, 2006 (198) E.L.T. 490 (Raj.) 3.6 The impugned order has held that until the introduction of Notification No. 58/2000- Customs and Notification No. 37/2000-C.E. both dated 08.05.2000, EOUs were not permitted to import any goods for use in quarrying of granites and hence, the appellant had violated ....
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.... regard is placed on the decision in PSL Limited v. Commissioner of Customs, 2015 (328) E.L.T. 177 (Tri.-Ahmd.), affirmed in 2016 (331) E.L.T. A45 (SC), Morteo Transfreight Reefer, Container Ltd. v. CCE, 2016 (341) E.L.T. 136 (Tri.-Mum.) Sterline Optical Technologies Ltd. v. CCE, 2011 (270) E.L.T. 266 (Tri.-Mumbai) and G.T. Cargo Fitting India Pvt. Ltd. v. Commissioner, 2019 (370) E.L.T. 1181 (Tri.-All.). 3.8 The Appellant submits that vide Circular No. 122/1995-Cus. dated 28.11.1995, the CBEC had directed that no show-cause notice should be issued to an EOU on the issue involving the interpretation of the provisions of a notification unless the Board has examined the issue and settled the legal position. Further, it is submitted that the EOUs are subject to the jurisdiction of the Development Commissioner and without their determination, no show-cause notice can be issued for demand of duties or for ordering debonding of the EOU. Reliance is placed on the Circular No. 21/1995-Customs dated 10.03.1995 and the Circular F.No. 305/86-FTT dated 12.09.1986 in this regard. Reliance is also placed on the decision in Apex Recyling Pvt. Ltd. v. CCE, Delhi, 2008 (230) E.L.T. 599 (Tri.-Del....
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....93/1B/1, Balakundi Village. At the EOU premise located at R.S. No. 293/1B/1, Balakundi Village, the Appellant undertook quarrying operations for quarrying of raw materials viz. rough granite block for further processing and manufacture of granite articles. The capital goods and consumables were procured at the Appellant's main unit in Tamil Nadu and transferred to R.S. No. 293/1B/1, Balakundi Village on filing of Shipping Bills and on receipt of permission from the Assistant Commissioner of Customs, Madras. The officers also acknowledged receipt of the transferred goods at R.S. No. 293/1B/1, Balakundi Village, regular Form ER-2 were submitted to the jurisdictional Departmental Authorities vis-à-vis the duty-free imports and procurement of goods, export performance, details of inter-unit transfers from Tamil Nadu as well as DTA clearances. At the quarrying site at Balakundi Village, the Appellant utilised the duty-free capital goods and consumables to excavate granite blocks, which were used for manufacture of granite articles and shifted the procured capital goods such as cranes and drills from the main unit at Tamil Nadu to the quarrying site at R.S. No. 293/1B/1, Balakundi....
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.... that the duty involved could be demanded at any point of time and therefore, the contentions of the Appellant that the demand is time barred was rejected. 5.2. In view of the undisputed facts discussed at para 5, we find that during the period of dispute from November 1986, to deny the benefit on the ground that the unit at Balagundi was not an 100% EOU defeats the very purpose. We also find that vide letter dated 01.04.1986 permission was accorded for manufacture in bond under Section 65 of the Customs Act, 1962 to the appellant in Karnataka. On 03.04.1986, permission was also granted for manufacture in bond of granite articles at Balakundi. The appellant has placed on record all the documents to prove the fact that the goods imported were transferred to the unit in Karnataka under approved documents and there is no dispute that the imported capital goods or the indigenous materials were used for quarrying purposes in Karnataka. The appellant has also placed on record intimation to the concerned officers about the receipt of imported and indigenous goods and also dispatch of rough granite blocks and finished goods. Therefore, the fact that only on 06.06.1997 the bonded warehou....
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....ired that the goods corresponding to the resultant products and the mandatory spares should be exported within the time specified in the DEEC or such extended period as may be granted by the licensing authority. The wordings in the notification have to be construed keeping in view the said object and purpose of the exemption. In the notification two different expressions have been used namely, `materials required to be imported for the purpose of manufacture of products' and `replenishment of materials used in the manu- facture of resultant products' which indicates that the two expressions have not been used in the same sense. The expression `materials required to be imported for the purpose of manufacture of products' cannot be construed as referring only to materials which are used in the manufacture of the products. The said exemption must be given its natural meaning to include materials that are required in order to manufacture the resultant products. On that view, the exemption cannot be confined to materials which are actually used in the manufacture of the resultant product but would also include materials which though not used in the manufacture of the resultant product a....