1995 (1) TMI 156 - AT - Central Excise

Summary

Issues:
Stay application regarding entitlement to benefit of Notification No. 75/81 for quantity used during plant re-activation.
Interpretation of intended use in the process of manufacture.
Consideration of Supreme Court judgments on exemption and nature of manufacture.
Difference between consumption and use.
Financial condition of the appellant.
Distinction between initial setting up and quantity used during shut down and re-start.
Appellant's financial capability to pay the amount in question.

Analysis:
The appellant, a manufacturer of fertilizer from Naptha, filed a Stay Application challenging the denial of benefit under Notification No. 75/81 for the quantity used during plant re-activation. The dispute centered on whether the quantity used during shut down for maintenance constituted intended use in the manufacturing process. The department argued that such use did not qualify for the benefit as it was for plant maintenance, not fertilizer production. The appellant contended that the quantity was essential for the manufacturing process, supported by expert opinions and previous judgments.

The appellant cited the Supreme Court's judgments in M/s. Rajasthan State Chemical Works and Tata Oil Mills Co. Ltd. to emphasize the importance of exemption objectives and the nature of the manufacturing process. Additionally, a letter from the Board regarding raw naptha assessment under Notification No. 187/61 was highlighted. The distinction between consumption and intended use was crucial, with the notification focusing on the latter. The appellant's financial distress, with a significant loss incurred, was also raised to support the waiver request.

The Departmental Representative opposed the application, arguing that the shut-down usage was for maintenance, not manufacturing, and the appellant's financial strength could cover the amount. The Tribunal acknowledged similarities with a previous case but noted the need for a detailed analysis during the main appeal hearing. Considering the totality of circumstances and the precedent set in M/s. Hindustan Fertiliser Corp., the Tribunal granted a waiver of pre-deposit, subject to the appellant depositing Rs. 1 Crore within 8 weeks. Failure to comply would lead to appeal dismissal without further notice, with a follow-up scheduled for compliance reporting and further orders.