TMI Blog1989 (11) TMI 185X X X X Extracts X X X X X X X X Extracts X X X X ..... to as the Respondents) who are engaged in the manufacture of Ammonia Nitrate Lumps Classified Ammonia Nitrate Lumps in their Classification list under Chapter sub-heading No. 2806.90 instead of 3102.00 and as such credit of duty paid on the inputs used in the manufacture of Ammonia Nitrate was not admissible under Rule 57A as Chapter 31 of the schedule to the Central Excise Tariff Act was not covered as a finished product under Notification No. 177/86 dated 1-3-1986 issued under Rule 57A of the Central Excise Rules, 1944. Therefore, a show cause notice C. No. CE/28/Demands/l/86-87/542 dated 23-3-1987 covering the period from 1-3-1986 to 28-2-1987 was issued to the Respondents by the Superintendent, Central Excise, Mohali calling upon them ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stand that if ammonium nitrate was held to be classifiable under Chapter 31, the inputs used in its manufacture namely oxygen and ammonia would have been exempted under Notification No. 40/85. The learned Assistant Collector in his order has held that there was no dispute with regard to the classification of ammonia nitrate after amendment of the tariff under the Amendment Act enacted on 10-2-1987. The dispute was only regarding the classification prior to 10-2-1987. The Asstt. Collector had held that the party had never mentioned that ammonia nitrate has fertilizing elements but is not used as fertilizer. He further added that if the party had given such a description, the classification under Chapter 31 would have been facilitated by Cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Collector as self-contradictory. He further observed that the goods in question being classified as fertilizer by the Asstt. Collector during the relevant period, the appellants have been entitled to exemption from duty in respect of the inputs under Notification No. 40/85 and the question of availing MODVAT credit would not have arisen during the period in question. The Collector held the order of the Asstt. Collector approving the classification list with retrospective effect as not sustainable. He further held that if in the face of the approved list for the relevant period, the Asstt. Collector wanted to revise the classification, he should have taken into account the admissibility of other relevant exemption notifications too instead ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that if it is fertilizer, no duty is payable on oxygen and ammonia as per Notification No. 40/85. He submitted that demand of duty on ammonia used in the manufacture of fertilizer is not correct. He submitted that ammonia is captively consumed and ammonia nitrate is sold as explosive and is also used for manufacture of fertilizer namely, Calcium Ammonia Nitrate. 7. We have heard both the parties, perused the records and citations relied upon by the parties. It is observed that the Assistant Collector has applied two yardsticks - one for the purpose of the classfication of the goods in question ammonia and the other for the eligibility of the duty concession in terms of the Notification No. 40/85. On reading of the Notification No. 40/85 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e no reason as to why exemption of Notification No. 40/85 should not be granted to the respondents in this case. On perusal of the citations and also on the facts and circumstances of the case, we hold that the respondents are entitled for the exemption sought for by them. The learned Asstt. Collector cannot retrospectively give effect as rightly held by the Collector. There is no infirmity in the order of the Collector (Appeals). The respondents are also entitled for MODVAT credit as per the notification. They are also availing of the same even after the amendment. Perusing the citations referred to by the respondents, we observe that the ratio of the ruling is also applicable to the facts of this case. There is no merit in the appeal and ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
