Customs, Excise and Gold Tribunal - Mumbai
Maharashtra State Electricity Board vs Commissioner Of Customs And Central ... on 7 June, 2001
ORDER Gowri Shankar, Member (T)
1.The application is for waiver of deposit of penalty of Rs. 25 lakhs imposed on the applicant under Rule 209A.
2. The order of the Commissioner adjudicated upon a common notice issued to Elecon Engineering Company Limited and to the applicant. The notice proposed to recover duty from Elecon Engineering Company Ltd., and proposed penalty on it and the appellant. By a letter of intent dated 5.5.1998, Elecon Engineering Company Limited, contracted to supply and erect a coal handling plant in the thermal electricity generating station which the applicant was setting up at Chandrapur. The Chandrapur project was initially funded by the International Fund for Reconstruction and Development (the World Bank). Notification 108/95 exempts goods supplied to such projects. The Commissioner finds that the loan that was initially promised by the World Bank for the project was suspended on 22.10.1996 and the loan itself was closed on 30.6.1998. The goods were supplied by Elecon Engineering to the applicant subsequent to this date. Hence, they were not supplied to a project funded by the World Bank, and the benefit of the notification would therefore not be available.
3. We have in our earlier order disposed of the stay applications filed by Elecon Engineering Company Limited and N.S. Patel, its employee (applications E/stay-2664 & 2665/2000). The Commissioner finds that the applicant now before us colluded with Elecon Engineering Company Limited by issuing it a certificate dated 6.4.1997 stating that the supply to this project were being made to a project financed by the World Bank and entitled to deemed export benefit. The applicant was motivated to issue this certificate in order to relieve its burden of duty which would otherwise would have fallen on it.
4. The contention of the counsel for the applicant is that the certificate was issued in pursuance of a clarification issued by the Ministry of Finance, Department of Economic Affairs. The letter dated 28.7.1998 of Geeta Narayan, Under Secretary (EE) to the Directorate General of Foreign Trade, communicated the view of that department, which is stated to be the agency co-ordinating with the World Bank and the Power Finance Corporation for the project in question, that the benefit of deemed export, provided for in the relevant import policy, would be available for supplies to the project. It is on this basis that the Directorate General of Foreign Trade in his letter of 4.10.1998 has informed the Power Corporation that the benefit would be available.
5. It is to be noted that neither of these letters and the certificate issued by the applicant to Elecon Engineering Company Limited refers to the exemption under the notification in question. That benefit is clearly not part of the deemed exports benefits provided in that policy; however, that exemption runs parallel to such benefit. Further the Commissioner herself offers as justification for penalty on Elecon Engineering Company Limited the fact that the letter of intent clearly provided that the contracted price includes duties or other charges. That is what in fact the clause 1.0 of the letter of intent says. Therefore, prima facie the applicant would not have benefited by the issue of this certificate, which in any case issued on the basis of clarification of the proper officer of the Government of India.
6. On these facts, therefore, we waive deposit of the penalty imposed on the applicant and stay its recovery.