M/s. JPG, a 100% export oriented undertaking (100% E.O.U. in short) imported DG sets and furnace oil duty free for setting up captive power plant…

The facts of the case are similar to the case of Commissioner v. Hanil Era Textile Ltd. 2005 (180) ELT A44 (SC) wherein the Supreme Court agreed to the view taken by the Tribunal that in the absence of a restrictive clause in the notifications that imported goods are to be solely or exclusively used for manufacture of goods for export, there is no violation of any condition of notification, if surplus power generated due to unforeseen exigencies is sold in domestic tariff area. Therefore, no duty can be demanded from M/s JPG for selling the surplus power in domestic tariff area for the following reasons: (i) They have used the DG sets and furnace oil imported duty free for generation of power, and (ii) such power generated has been used for manufacturing goods for export, and (iii) only the surplus power has been sold, as power cannot be stored.