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2. We have heard S/Shri J.C. Patel & W. Christian, learned advocates appearing for appellants and Shri Samir Chitkara, learned SDR for the Revenue.

3. As per facts on record, M/s Adani Exports Ltd. imported 5104.00 MT of HSD oil under the agency of M/s Saheli Synthetics (P) Ltd., who is a 100% EOU. In as much as HSD is a canalized item and its import is permitted only through the canalized agency by the licence holder or by a 100% EOU as actual user, it was observed that in as much as M/s Adani Exports Ltd. was neither appointed as canalized agency nor produced any licence issued by DGFT nor were they 100% EOU, nor the goods imported by them were meant for supply to EOU, imports made by them were not in accordance with law. Accordingly, investigations were initiated against them and during the course of investigation, statements of various persons were recorded. As a result of said statements, it came on record that one M/s Saheli Synthetics (P) Ltd. is a 100% EOU and as such is entitled to import HSD as an actual user. They had given a letter of authority to M/s Adani Exports Ltd. to import the HSD as their agent along with copies of green card, import-export code number and general bond executed by them. The execution of such letter of authority dt. 30.03.01 by M/s Saheli Synthetics (P) Ltd. stands accepted by the director of the said M/s Saheli as well as by the authorized representative of M/s Saheli and is not in dispute. However, it is the stand of the Revenue that such an arrangement between M/s Adani Exports Ltd. and M/s Saheli was with a malafide intention of importing HSD without payment of duty and diverting the same to the domestic market, for which proceedings were initiated which culminated in to the impugned order passed by the Commissioner.