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2014 (7) TMI 1117 - CESTAT MUMBAIExemption from the excise duty under Notification No. 6/2002-C.E. or Notification No. 6/2006-C.E. - held that:- As regards the demand of duty on BHGO and naphtha for the period prior to 1-7-2001, this Tribunal considered this question in the Chennai Petroleum case (2008 (6) TMI 29 - CESTAT, CHENNAI) and it was held that no duty would be leviable on any quantity of fuel/oil/LSHS used for generating steam required for refining of crude petroleum in the appellant’s refinery in view of the provisions of Rule 43(a) of the Central Excise Rules as the refinery was a bonded warehouse and the use of fuel/oil/LSHS without payment of duty was permitted for the conduct of further manufacturing process within the refinery. - This is also in conformity with the ratio of the decision of the Apex Court in the case of Chennai Petroleum (2007 (4) TMI 4 - SUPREME COURT OF INDIA) wherein it was held that exemption on goods arising in the manufacture of electricity, which in turn was used in the manufacture of petroleum products, would be available as the activity was undertaken within the refinery, which was deemed as a warehouse. Following the ratio of the said decision, in the present case also it has to be held that the demand for the period prior to 1-7-2001 in respect of BHGO and naphtha used within the refinery for the manufacture of electricity, which was further used in the manufacture of goods dutiable or otherwise will not sustain in law. If the appellant has undertaken the credit reversal as claimed by them, benefit of Notification No. 67/95 cannot be denied to the appellant provided the reversal has been correctly done and whenever there is a delay in reversal, interest liability has been discharged on the quantum of credit reversed from the due date to reversal till the actual date of reversal. Finance Act, 2010 retrospectively amended the Cenvat Credit Rules as it stood at various points of time so as to provide for reversal of credit attributable to inputs used in the manufacture of exempted final products subject to the appellant reversing the credit and the credit so reversed is certified by a Chartered Accountant/Cost Accountant and interest liability is discharged at the rate of 24% per annum for the period of delay in reversal. - benefit of this retrospective amendment ought to be given to the appellant, if these conditions are complied with. However, this is a matter of verification which has to be undertaken by the adjudicating authority and the appellant has to lead the necessary evidence that they have discharged the credit liability as provided for under the Finance Act, 2010 along with appropriate interest liability. Subject to submission of such evidence, the adjudicating authority has to consider the matter afresh and extend the benefit of Notification No. 67/95. Excise duty would be leviable on naphtha used in the generation of electricity, which, in turn, were consumed for lighting of roads/yards, administrative building, cafeteria etc. Following the ratio of the said decision in the present case also, it has to be held that the appellant would be liable to pay Excise duty on BHGO and naphtha used in the manufacture of electricity, which, in turn, has been used in administrative/canteen building etc. The quantum of such BHGO and naphtha needs to be worked out and the duty demand needs to be quantified. - Matter remanded back - Decided in favour of assessee.
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