TMI Blog2004 (1) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... cturing. 3.2By Circular No. 44/89, dated 19-7-1989 (Annexure "B" to the petition), the Central Board of Excise and Customs directed all the authorities under the Excise Act that no excise duty can be lawfully charged or be required to be paid on Prilled Ammonium Nitrate as is obtained from "ammonium nitrate melt" since excise duty is chargeable only on manufacture of excisable goods. The said circular still holds the field. 3.3Notwithstanding the decision of the Larger Bench of CEGAT in Supreme Chemical Works v. Collector of Central Excise, Jaipur - 2000 (119) E.L.T. 707, the Central Board has not withdrawn the above numbered Circular dated 19-7-1989 and, therefore, the department is bound by the said circular, as held by the Apex Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aration. In Para 8(a) of the said declaration, the petitioners had stated that the product is not excisable in terms of CBEC Circular No. 44/89, issued on 19-7-1989. In Para 8(b), the petitioners had indicated the ground of exemption under the said circular and also pointed out the stand taken by the department in the past that conversion of Ammonium Nitrate Melt into Prilled Ammonium Nitrate does not amount to manufacture and no new product comes into existence. 4.On the other hand, Mr. D.N. Patel, learned Senior Standing Counsel for the Central Government has submitted that when the Larger Bench of CEGAT has already held in Supreme Chemical Works' case that the statement of law in Anil Chemicals' case must be held to be incorrect, the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ities from the petitioners herein. In the first place, although it is true that what is challenged in this petition is a show cause notice (Annexure "L" to the petition), the basis of the notice is the CEGAT judgment in Supreme Chemical Works' case:- "On scrutiny of the records, it appears that the unit is taking resort to the CBEC Circular Nos. 44/89, dated 19-7-1989 56/89, dated 21-9-1989 issued subsequent to the CEGAT Special Bench "C" New Delhi Order …. dated 7-6-1985 in the case of M/s. Anil Chemicals Pvt. Ltd., Aurangabad v. Collector of Central Excise, Aurangabad, wherein it was upheld that production of Prilled Ammonium Nitrate 99% from Ammonium Nitrate 75% to 82% does not amount to manufacture under Central Excise Law/Act. Howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs that Circular No. 44/89, dated 19-7-1989 (Annexure "C") is not cancelled or withdrawn, is not disputed on behalf of the respondents. In that view of the matter, we are of the view that the principles laid down by the Apex Court in Ranadey Micronutrients v. Collector of Central Excise, 1996 (87) E.L.T. 19 and Paper Products Ltd. v. Commissioner of Central Excise, 1999 (112) E.L.T. 765 will reply. In the said decisions, the Apex Court has taken a view that departmental circulars are binding on the department even if such circulars are not warranted by the language of any section of the Act. In the above decisions, the Apex Court confirmed the relief in favour of the assessee on the basis of such circulars even through, on interpretation, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties did not advice any change. (iv) After taking over the unit, the petitioner-Company filed letter dated 12-12-2001 with the Asstt. Commissioner, Central Excise, Daman stating that since Prilled Ammonium Nitrate is manufactured from Ammonium Nitrate Melt, the petitioners are unable to obtain Excise Registration and seeking confirmation thereof. The authorities did not inform the petitioners that the petitioners were carrying out any manufacturing activity. The respondents have not stated any part of the declaration as incorrect. 8.As regards the MO Circular No. 23/98, dated 27-7-1978, the same deals with manufacture of Ammonium Nitrate and Calcium Carbonate from Calcium Ammonium Nitrate as will be clear from the contents of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ners was explained in Para 9 of the petitioners' declaration dated 16-1-2003 in the following terms :- "We buy Ammonium Nitrate Melt mainly from Gujarat Narmada Valley Fertilizers Company Limited (GNFC) and put it through evaporators for improving the concentration. The said concentrated Ammonium Nitrate is then put through prilling tower leading to change in physical state from liquid to solid to suit end application. Between Ammonium Nitrate Melt and Prillled Ammonium Nitrate there is no change in chemical composition (NH4NO3) except for removal of extra moisture and change from liquid to solid." It, therefore, appears that the process being carried on by the petitioners is different from manufacturing activity referred to in MO Circu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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