TMI Blog2019 (3) TMI 973X X X X Extracts X X X X X X X X Extracts X X X X ..... er the appellant are entitled to take credit of the entire duty of 15% paid by them as credit when Notification No. 14/1997-CE (NT) restricts the same to 10%? - Held that:- In the plain and simple language of the notification and law, it is clear that the credit is restricted to 10%. Ld. Counsel has sought to invoke the reasons behind restricting the credit to 10% as enumerated in the trade notice number 56/1997-(S). It is seen that the notification 14/97-CE(NT) does not specify the intention behind the same. It merely restricts the credit to 10% - it cannot be held that the appellants are entitled to credit @ 15%, the plain and simple language of the Notification does not allow any scope of any interpretation. Appeal dismissed - decided against appellant. - E/CROSS/126/2011-DB, Appeal No. E/857/2011-DB - A/10489/2019 - Dated:- 13-3-2019 - MR. RAMESH NAIR, MEMBER (JUDICIAL) And MR. RAJU, MEMBER (TECHNICAL) For Appellant: Mr. L. Patra (AR) For Respondent: Mr. Willingdon Christian (Advocate) ORDER Per: Raju This appeal has been filed by Revenue against impugned order permitting M/s. Indian Oil Corporation Ltd. (IOCL) Cenvat credit of Gas Oil in ter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w Sulphur Heavy Stock (LSHS) and consequently, in terms of Notification No 14/97-CE(NT) dated 03.05.1997, the appellant are only entitled to credit @ 10% as against duty paid @ 15%. Ld. Counsel pointed out that the matter regarding duty liability on the Gas Oil consumed captively for generation of electricity has been settled by Hon ble Apex Court in the appellant s favour vide the decision in the case of India Oil Corporation Limited-2006 (202) ELT 37 (SC). He pointed out that as a consequence no duty was payable on the goods. He pointed out that in similar circumstances in the case of Indian Oil Corporation Ltd. 2006 (201) ELT 582 (T) following was observed:- 4. As the appellant has succeeded in its claim for exemption, the entire duty paid by it is required to be returned to it. However, in the peculiar facts of the present case, such refund is not necessary. Allowing the erroneously collected duty amounts as Modvat credit obviated the requirement for refund and restores the amounts to the appellant. Applying the restriction contained in Notification 14/97 to the credit amounts would have the effect of reducing the refund to 95%. There is no justification for such a reduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en able to show the relevant decision, for which purposes he prays for remanding the matter to original adjudicating authority. 5. In view of the above, we remand the matter to the original adjudicating authority for fresh decision in the light of the order of Tribunal referred (supra) as also in the light of the outcome of the dispute on the basic issue of exemption for the relevant period. Needless to say the appellant would be given an opportunity to put forth their case, before taking decision. 3.1 He argued that in the remand proceedings the Assistant Commissioner has again confirmed the demand by invoking Notification No.14/97-CE (NT). He pointed out that the said decision ignores the decision of Hon ble Apex Court in the case of Indian Oil Corporation Ltd. (Supra) wherein, it has been held that LSHS consumed captively does not attract duty even if used for manufacture of electricity. 3.2 Ld. Counsel further pointed out that the reason why only 10 % credit is allowed as against payment of 15 % duty (LSHS) was explained in the trade trade notice No. 56/97 issue by Central Excise Commissionerate, Vadodara on 21.05.1997. He pointed out that in the said circular the fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Oil (LSHS) used for generation of electricity is hit by Notification 14/97-CE(NT) or not. Ld. Counsel has relied on the decision of Hon ble High Court of Gujarat in case of Gujarat Parraffins Pvt. Ltd. (supra) wherein the following has been observed. 39. In the aforesaid premises of the matter, we hold that the Notification No. 14/97 dated May 3, 1997 is ultra vires Articles 14 and 19(1)(g) of the Constitution of India in so far as it is sought to be applied to the petitioner in respect of import of its non-APM products. (emphasis supplied) It is seen that the dispute in the said case was with reference to imports and Hon ble High Court has held that the Provisions of Notification 14/97-CE(NT) dated 03.05.1997 is ultra virus to article 14 and 19 (1)(g) of the Constitution of India in so far as it is sought to be applied to the petitioner in respect of import of it is non-APM product . Thus, the decision of Hon ble High Court is only with reference to imports made of products which are not covered by administrative price mechanism. The case of the appellant is not falling in the said category, and therefore, the decision of Hon ble High Court is not applicable t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from those that are left out of the group, and (ii) that the differentia must have a rationale relation to the objects sought to be achieved by the statute in question. The fundamental principle flowing from the judgments relied upon by the petitioner is that Article 14 forbids class legislation but permits reasonable classification for the purpose of legislation which classification must satisfy the above twin tests. The Government would have to affirmatively satisfy the Court that the twin tests had been satisfied, and for that the Government must establish not only a rationale principle on which classification was founded but the Government must also co-relate it to the objects sought to be achieved. If this cannot be shown by the Government, then the departure was arbitrary, irrational, unreasonable and discriminatory. The only objective sought to be achieved by restricting Modvat credit to the extent of 10% for inputs in the nature of petroleum products was to allow manufacturers purchasing such petroleum products from public sector refineries the credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the necessity of filing refund, the appellant were allowed to avail the entire credit @ 15% paid by them. It can be seen from the said order which reads as follows: The appellant is an oil refinery which used LSHS/RCO produced by it in the captive generation of electricity. Such use was eligible for exemption from Central Excise Duty under several notifications. However, this exemption was denied by the jurisdictional authority and those orders were challenged in appeal. Having failed in the claim for exemption, the appellant resorted to take Modvat credit of the duty paid on LSHS. This claim for Modvat remains restricted to 95% of the duty paid on the inputs in terms of Notification No. 14/97 dt. 3-5-97 under the impugned order. 2. The contention of the ld. Sr. Counsel is that the dispute about eligibility for the exemption remains decided in favour of the appellant by the Tribunal in appeal under Final Order No. 337/06 dt. 28-3-06 and earlier order of the Tribunal dt. 11-9-92. It is his submission that since no duty was payable at all, there is no justification for denying 5% of the duty paid as Modvat credit. 3. Ld. DR has contended that since Notification No. 14/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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