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1987 (2) TMI 296 - Commissioner - Central Excise
Issues:
- Appeal against demands for duty on Low Sulphur Head Stock (LSHS) used in generating steam - Interpretation of Notification No. 147/74-C.E. and Notification No. 356/77-C.E. - Whether steam generated from LSHS qualifies as raw material for concessional rate under the notifications Analysis: The appeal was filed by M/s. Gujarat Narmada Valley Fertilizers Co. Ltd. against the demands amounting to Rs. 1,00,56,948.46 adjudged by the Assistant Collector of Central Excise, Dn. v. Baroda. The demands were related to the use of Low Sulphur Head Stock (LSHS) without payment of duty under Chapter X procedure, as per Notification No. 147/74-C.E. and Notification No. 356/77-C.E. The appellants contended that the Assistant Collector erred in confirming the demands for the quantity of LSHS used in generating steam, arguing that steam is a raw material used in the manufacture of fertilizers. The appellants also highlighted that they did not sell the steam outside but used it within the factory for fertilizer production, treating it as a raw material. A personal hearing was granted, during which the arguments were reiterated by the appellant-company's representatives. Upon review of the case background, order-in-original, appeal petition, and arguments presented during the personal hearing, the Commissioner found merit in the appellant's contentions. It was acknowledged that the steam generated from LSHS was not sold or supplied outside but was essential for manufacturing fertilizers falling under Tariff Item 14HH. The Commissioner determined that the steam qualified as a raw material or input eligible for the concessional rate under the relevant notifications. The decision was supported by previous rulings of higher authorities, including the Central Board of Excise & Customs and Tribunal judgments in similar cases. Citing these precedents, the Commissioner set aside the lower authority's order and allowed the appeal, granting consequential relief to the appellants.
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