TMI Blog1984 (3) TMI 378X X X X Extracts X X X X X X X X Extracts X X X X ..... team generated in the factory of the appellants, employed for internal motive power and thereafter supplied to two other units for their utilisation, is eligible for exemption from excise duty in terms of Notification No. 118/75-C.E., dated 30-4-1975. Under this notification goods falling under Item No. 68, manufactured in a factory and intended for use in the factory in which they are manufactured, or in any other factory of the same manufacturer, are exempt from excise duty. The question is whether the steam used in the manner described above qualifies for this exemption. The appellants have also raised the question of limitation, which will be referred to separately. 3. Appearing before us for the appellants, Shri Kapoor explained th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication No. 118/75 was issued which covers all goods used for captive consumption. Shri Kapoor fairly admitted that the exemption was not admissible in respect of steam produced during the period 1-3-1975 to 29-4-1975. (This was, however, without prejudice to his argument on limitation). 6. For the Department, Shri Sachar submitted that the argument of double taxation was dropped by them before the Appellate Collector and could not be allowed to be revived before us. He also submitted that the concept of double taxation was accepted in Central Excise Law. In this connection he cited the judgment of the Andhra Pradesh High Court in the case of Standard Packagings v. Union of India and Another, reported in 1983 E.L.T. 786. In para 8 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods for a particular purpose. On a reading of these various notifications, it is apparent that the use which is contemplated amounts to using up or consumption . In fact, this type of use is popularly referred to as captive consumption . Scrutiny of a few other notifications also issued under Item 68 will make the position clear. Thus, Notification No. 167/79, dated 19-4-1979 exempts parts and accessories of motor vehicles and tractors intended for use in further manufacture of excisable goods either in the factory in which they are manufactured or in any other factory. It will be seen that the wording used is very similar to the wording of Notification No. 118/75. In the case of Notification No. 167/79, it is quite clear that the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ducing or processing any goods, even if they are intended for use in the factory in which they are manufactured. This would also show that the term use in the notification does not mean a use which can be repeated, but on which results in the article losing its utility as such article. 9. For these reasons, we consider that the lower authorities were correct in holding that the steam supplied by the appellants to other factories as medium pressure or low pressure steam was not eligible for the exemption under Notification No. 118/75. 10. We do not find force in the argument based on double taxation, because that question really does not arise. The steam becomes liable for excise duty when it is first produced, and since by its emp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it, Shri Sachar submitted that there had been no assessments in this case and therefore Rule 10 was not attracted. 13. On this question, we find that there is substance in the contentions of the appellants. They had specifically referred in their classification list to the production of medium pressure and low pressure steam and its being supplied to other factories. No doubt their explanation given in the form of Remarks could have been clearer, but the fact remains that they had made a substantial disclosure. We find that the excise authorities had on 7-3-1975 approved the classification list without indicating that the steam was liable to duty. (In their approval they have used the words are approved provisionally as non-dutiable ..... X X X X Extracts X X X X X X X X Extracts X X X X
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