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TMI Blog1997 (3) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... ucts which is annexed to the notification, inter alia, covers Ethylene, Propylene, Butadiene, Benzene, Toluene and Para-Xylene which are the products manufactured by the appellant from raw naphtha obtained by the appellant under the concessional rate of excise duty under the above notification. According to the appellant it has not violated any term of this notification. 3. The text of the notification is as follows : "Concessional rate on naphtha used in the manufacture of specified chemicals. - In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excises and Salt Act, 1944 (1 of 1944), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts raw naphtha, falling under sub-heading No. 2710.14 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), intended for use in the manufacture of the products specified in the Table hereto annexed from so much of the duty of excise leviable thereon as is in excess of the amount calculated at the rate of Rs. 60 per kilolitre at 15ÉC on the quantity of naphtha consumed in the manufacture of the said products : Provided that where the use is elsewhe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The present appeal is from this order. 7. Broadly speaking, the process of manufacture adopted by the appellant is as follows : Raw Naphtha which is obtained by the appellant at a concessional rate of duty under the above notification is cracked at high temperature as a result of which (1) olefenic rich gas (2) pyrolysis fuel oil and (3) pyrolysis gasolene are produced. Out of these, olefenic rich gas is further processed for the purpose of obtaining ethylene, butadiene, propylene and other items enumerated in the Table. Residual gas is flared while the residue is returned to naphtha cracker. The products which are obtained by the further processing of olefenic rich gas are all covered by the table in the concession notification. Pyrolysis fuel oil which is the second resultant of the thermal cracking process is used internally as fuel and is also removed as carbon black feed stock. 8. Upto this stage the respondent has accepted that the appellant has complied with the requirements of the above notification. The difficulty in the present case has arisen on account of the third resultant of the thermal cracking processing, namely, pyrolysis gasolene. Pyrolysis gasolene which ari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic rich gas, pyrolysis fuel oil and pyrolysis gasolene. There is no way in which the appellant could have avoided this outcome. Out of these resultants, olefenic rich gas is required to be further processed for the manufacture of items forming part of the table. One of the other resultant products, namely, pyrolysis gasolene is further processed to obtain some more products which are listed in the table, namely, benzene and toluene. For this processing of pyrolysis gasolene also the department has no objection because as a result of processing of pyrolysis gasolene the products which are obtained are listed in the table. 12. However, the further processing of residual pyrolysis gasolene after extraction of benzene and toluene in the petroleum resin plant of the appellant is objected to by the department. This further processing of pyrolysis gasolene residue results in production of petroleum resins which are not enumerated in the said table. There is no dispute that on petroleum resins so manufactured the appellant is paying duty of excise. The only dispute is as to the duty of excise to be levied on pyrolysis gasolene residue which is processed in the petroleum resin plant of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for use in the generation or distribution of electrical energy. The Court said that the mere fact that some of the cement supply was, in fact, used by the Board for activities not directly connected with the generation or distribution of electrical energy cannot make any difference to the availability of the exemption. The intention of the Board was that the cement was directly connected with the generation or distribution of electrical energy. 15. In the present case, the entire raw naphtha which is obtained at concessional rates of duty is made use of for the purpose of obtaining products permitted under the said exemption notification. Only some of the processed residue is used for the manufacture of other products. There is, therefore, no violation in the present case of the exemption notification. 16. In the case of M/s. Steel Authority of India Ltd. v. Collector of Central Excise [C.A. Nos. 3406-11/90 with C.A. No. 3178/ 90 decided by this Court on 30-7-1995 [reported in 1996 (88) E.L.T. 314 (S.C.)], S.P. Bharucha and K.T. Thomas, JJ.)] raw naphtha was subjected to a concessional rate of duty under an exemption notification provided that it was intended for use in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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