TMI Blog2018 (2) TMI 1455X X X X Extracts X X X X X X X X Extracts X X X X ..... emanded from a person other than manufacturer of the excisable goods in a situation where the goods are locally procured under N/N. 6/2002-CE or 6/2006-CE, the liability to pay the duty would be that of the user manufacturer who in the present case is RCF? Held that: - It is common ground that the naptha was supplied by the respondent-assessee by resort to the international competitive bidding process. The naptha brought for this supply was claimed to be exempted by the assessee. The tribunal noted that naphtha is exempt from payment of excise duty if supplied against international competitive bidding and used in the manufacture of fertilizers - The tribunal came to the conclusion that the notifications read together would reveal that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal of the Revenue challenges the order passed by the Central Excise and Service Tax Appellate Tribunal dated 15th April, 2013. 2. The following two questions are proposed by the Revenue as substantial questions of law:- (a) Whether benefit of Notification No. 6/2002-CE as amended [Sr. No. 30] or Notification No. 6/2006-CE [Sr. No. 91] read with Notification No. 21/2002-Cus dated 1st March, 2002 [Sr. No. 76] which was available to naphtha used in the manufacture of fertilizer , is available to the respondent for that quantity of naphtha which was manufactured and cleared by it to M/s. Rashtriya Chemicals and Fertilizers Ltd (RCF). availing the benefits under the said notifications, but admittedly, not used by RCF in the manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notifications are annexed as Exhibit 'B'. 5. Then, what is referred to is Notification No. 6/2002 and replacement thereof by notification dated 1st March, 2006 continuing the exemption as mentioned above. 6. A copy of the last notification in the series is annexed as Exhibit-'C' to the petition. 7. Before us is an assessee, namely, M/s. Hindustan Petroleum Corporation Limited (HPCL) engaged in the manufacture of petroleum products. These products fall under Chapter 27 of the Central Excise Tariff Act, 1985. The assessee before us supplied naphtha to M/s. RCF against international competitive bidding at nil rate of duty and claimed the benefit of the above notifications. 8. The Revenue proposed to deny that on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... several cases detected, by which, the stocks/supplies of naphtha were diverted and by such clandestine diversion, there was substantial revenue loss. The exemption from duty was available when naphtha was used in the manufacture of fertilizer. 12. The second argument is that the tribunal concluded that the actual user condition has to be fulfilled by the buyer/user RCF and that the assessee before us, namely, HPCL cannot be expected to ensure the use of the goods by the RCF. Even this finding is termed as perverse. 13. Mr. Patil would support the conclusion of the tribunal and would submit that given the language of the notification, the assessee before us is not expected to ensure fulfillment of the condition and it is imposed on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 's order and particularly its relevant para. The tribunal found that all goods supplied against competitive bidding are exempt from payment of excise duty provided the said goods are exempt from duties of customs leviable under the First Schedule to the Customs Tariff Act, 1975 and the additional duty leviable under section 3 of the Customs Tariff Act, 1975. It also found that goods falling under hearing 27.10 or 2714.90 are exempt from payment of customs duty and additional duty for the manufacture of fertilizers. However, the said customs duty exemption is not unconditional. The customs duty exemption is available if the importer follows Condition No. 5 in the Customs Notification No. 21/2002 which mandates that the importer follows t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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