Custom, Excise & Service Tax Tribunal
Cce Mumbai Ii vs M/S. Bharat Petroleum Corporation Ltd. on 11 March, 2022
CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, MUMBAI
REGIONAL BENCH
Excise Appeal No. 3074 of 2006
(Arising out of Order-in-Original No. 21/2005 dated 27.09.2005 passed by the
Commissioner of Central Excise, Mumbai-II)
Commissioner of Central Excise, Mumbai-II Appellant
9th floor, Piramal Chambers, Jijibhoy Lane,
Lalbaug, Parel, Mumbai 400 012.
Vs.
M/s. Bharat Petroleum Corporation Ltd. Respondent
Mahul, Mumbai 400 074.
Appearance:
Shri S.K. Mathur, Special Counsel, for the Appellant Shri Gajendra Jain, Advocate, for the Respondent CORAM:
HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) HON'BLE DR. SUVENDU KUMAR PATI, MEMBER (JUDICIAL) Date of Hearing: 11.03.2022 Date of Decision: 11.03.2022 FINAL ORDER NO. A/85321/2022 PER: SANJIV SRIVASTAVA This appeal has been filed by the revenue against order in original No 21/2005 dated 27.09.2005 of the Commissioner of Central Excise, Mumbai II. By the impugned order, the Commissioner has dropped the proceedings initiated against the respondents vide the show cause notices detailed in table below:
S. SCN No. Date Amount in Rupees Perio LSHS
No d cleared to
M/s.
1 V/Adj/Ch-1/R- 04.02.2003 7,83,89,31,900/- 1/98 Tata
1/Cr9/2003/Commr to Electric
6/01
2 V/Adi/Ch-1/R- 04.02.2003 3,29,43,14,1817- 7/01 Tata
1/Cr10/2003/Com to Electric
mr 6/02
3 V/Adj/Ch-1/R-1/Cr 03.07.2003 12,63,09,812/- 7/02 Tata
73/2003/Commr to Electric
12/02
2 E/3074/2006
4 V/Adj/Ch-1/R- 02.01.2004 2,08,07,41,217/- 12/02 Ahmedaba
1/Cr87/2003/Com to d Electric
mr 3/03
5 V/Adj/Ch-1/R- 27.02.2004 2,62,13,89,938/- 01/03 Tata
1/Cr180/2003/Com to Electric
mr 06/03
6 V/Adj/Ch-1/R- 27.02.2004 3,89,62,21,763/- 04/03 Ahmedaba
1/Cr94/2004/Com to d Electric
mr 12/03
7 V/Adj/Ch-1/R- 20.05.2004 3,84,92,08,384/- 07/03 Tata
1/C1138/2004/Co to Electric
mmr 02/04
8 V/Adj./Ch-1/R- 05.04.2005 22,36,63,705/- 3/04 Tata
1/CR14/BPCL/Com to Electric
mr./04 12/04
9 V/Adj/ch-1/R- 03.02.2005 41,58,120/- 1/04 Ahmedaba
1/Cr3/2005/Commr to d Electric
9/04
10 V/Adj/Ch-1/R-1/Cr 22.09.2005 21,12,41,365/- 10/04 Ahmedaba
47/Commr/M- to d Electric
11/2005 5/05 & Tata
Electric
Total duty demanded 24,14,61,80,385/-
2.1 Respondent, a Public sector Undertaking, has a refinery for manufacture of petroleum products and organic chemicals falling under Chapter 27 and 29 of the First Schedule to the Central Excise Act, 1985 (in short "the tariff"). In their refinery they along with other goods produce Low Sulphur Heavy Stock (LSHS) (2711.19), Long Residues (LR) (2711.19) and Refinery gases (RG)(2713.30).
2.2 They captively consume LR and RG, for production of other goods and avail exemption in terms of exemption notification No.67/95 - CE dt. 16.3.1995. This notification exempted all excisable goods except Light Diesel Oil, High Speed Diesel Oil and Motor Sprit, manufactured in a factory and used within the factory of production in or in relation to the manufacture of final products not exempted.
2.3 They cleared and sold LSHS to M/s Tata Electric Co. Ltd, Trombay, engaged in the generation of electricity, without payment of duty in terms of Notifications No.4/97 dt. 01.03.1997, 5/98 dt 02.06.1998, 5/99 dt. 28.02.1999, 6/2000 dt. 01.03.2000 and 3/2001 dt. 01.03.2001. These notifications 3 E/3074/2006 allowed clearance LSHS on nil rate of duty, if it was used in generation of electricity subject to following procedure as prescribed under Chapter X of the erstwhile Central Excise Rules, 1944 (CER, 1944).
2.4 Respondent did not declare to the revenue their intention to captively use the LR and RG in the manufacture of LSHS, which in turn was to be removed on payment of nil duty to M/s Tata Electric Co. for generating electricity, nor had provided Department any break-up of consumption of the impugned goods, i.e. RG and LR, in manufacture of LSHS and other products.
2.5 Alleging suppression Show cause Notice at Sl No 1 in table above was issued to the respondent for their failure to pay duty on such captive consumption of the impugned goods as violation of Section 4 of the Central Excise Act, 1944 (in short "the CEA") read with Rules 9(1), 52 A, 173 C, 173 F and 173 G(1) of the CER, 1944, thereby demanding the duty under the proviso to section 11 A (1). The notice also proposed confiscation under rule 173Q of the impugned goods meant for captive consumption in the manufacture of LSHS, recovery of interest under Section 11AB ibid on the duty not paid and penalty under section 11 AC/CEA and Rule 9(2) of CER, 1944.
2.6 Nine more show cause cum demand notices, listed at Sl. No. 2 to 10 in the table above, were issued for the subsequent period, demanding Central Excise duty for clearances made to M/s Tata Electric Co. and M/s Ahmedabad Electric upto May 2005.
2.7 These show cause notice have been adjudicated by the Commissioner by the impugned order dropping the entire proceedings.
2.8 Aggrieved by the order of Commissioner, revenue has filed this appeal.
3.1 Revenue has filed this appeal on the following grounds:
The adjudicating authority erred in applying the principle of marketability since there was no mention of the same in
4 E/3074/2006 the show cause notice. Further, the fact that the respondents were captively consuming LR & RG in the manufacture of their final product itself shows that the impugned products are saleable and hence, marketable. Actual / physical sale is not relevant to determine marketability.
The adjudicating authority did not make any conclusive and real attempt to ascertain salability and the market enquiries were incongruous. The adjudicating authority made enquiries with Reliance Refinery, Kochi Refinery and M/s MRPL about the status of Refinery Gases and Long Residues:
o Reliance Refinery (Exhibit 'B') vide their letter informed that they do not manufacture these products at all and hence when the said refinery does not manufacture these products, it cannot be concluded that there is no sale from the refinery;
o Kochi Refinery (Exhibit 'C') informed that these products are not being cleared to outside buyers. Apparently, it is a policy of the refinery to not sell the products to outside buyers. Nevertheless, it does not prove that the products cannot be marketed as held by the adjudicating authority;
o MRPL Refinery (Exhibit 'D') confirmed that the two residues do not arise in the course of their manufacturing process. Therefore, when no manufacture itself takes place, it cannot be concluded that there is no sale of said products by the refinery.
o Reports from Asst. Commissioner of Refineries and Mumbai Custom House (Exhibit 'E' and 'F'), showed that there was no import of the said goods. Non importation cannot lead to conclusion that there is no sale of the goods in the course of international sale. Merely lack of import at one port, cannot lead to conclusion that the goods are not marketable.
5 E/3074/2006 He failed to tap the vast resources of internet on refinery residues to establish marketability. On the internet, on many sites, there is lot of information available about marketability and various other aspects of the impugned "refinery residues" which establishes that the product is not only know internationally but research and technological advances by many companies has made it possible for it to be used in multiple ways or for manufacture of multiple products. Following web pages clearly establish the possibilities of the two products being marketed and sold:
o http://www.essar.com/power/news/apr 19 2004.htm of M/s ESSAR o http://www.wartsila.com/Wartsila/docs/en/power/m edia publications/energy news/22/refinery residues as fuel for diesel engines.pdf o http://www.ceocfointerviews.com/index.html o http://qinatusoil.tripod.com/id6.html o http://enitecnologie.it/english/attivita strategie/en_downstr eam processes.htm o http://www.shell-lubricants.com/learning center/refining.html, o http://www.manturbo.com/en/400/400 processdetail.php?a ppscope=REFINERIES&prod=REFINERY&cid=168, o http://www.uop.com/refining/1090.html,.
o http://www.dgmk.de/kohle/abstracts_velen6/Romey .pdf , o http://Intenc.com/Intenc/services/power/ utility.jsp.
o http://www.energyinst.org.uk/education/refineries/st anlow. htm o http://cheresources.com/refinery8.shtml,
6 E/3074/2006 o http://www.msc.com.my/today/default.asp?sec=B&i d=68& link=fulltext,.
o http://www.energy.ca.gov/oil/refinery output/definitions.ht ml, o http://www.intota.com/viewbio.asp?bioID=63760&p erID= 108062&strQuery=refinery-gas, These evidences clearly establish that these goods are marketable. Once the two impugned goods pass the multiple tests of "marketability", "saleability", "of them being capable of being sold", the test of dutiability also succeeds, as has been held by various courts and authorities in catena of decisions as follows:
o Delhi Cloth Mills [ 1977 (1) ELT (J177) (SC)] o Ilac Ltd. [1997 (94) ELT A61 (S.C.)] o Ambalal Sarabhai Enterprises [ 1989 (43) ELT 214 (S.C.)] o TISCO Ltd. [2004 (165) ELT 386 (S.C.)] The adjudicating authority also erred in as much as prior to 1st July 2001, no duty was leviable on the intermediaries so long as they were not cleared outside the refinery in terms of Rule 143A of the Central Excise Rules, 1944. Further, prior to 01.07.2001, a refinery was declared as warehouse in terms of Rule 140(2) of the Central excise Rules, 1944 for the purpose of Chapter VII and Rule 143A permitted the owner of the refinery to undertake blending or manufacturing processes on the warehoused goods. Rule 144 provided for the clearance of warehoused goods only on payment of duty except when clearances were from one warehouse to another.
However, after 01.07.2001, the refinery was no more declared as a warehouse. All warehousing provisions contained in Chapter VII ibid were condensed in Rule 20 of the Central excise Rules, 2001. The erstwhile Rule 143A stood abolished. Under the changed scenario, duty
7 E/3074/2006 appeared to be leviable on intermediate goods consumed within the refinery used for manufacture of exempted final products. The exemption under Notfn. No. 67/95 ibid was, therefore, not available. The adjudicating authority erred in ignoring that the erstwhile rules stood abolished and in the wake of new Rules, even captive consumption attracted payment of duty.
the observation of the adjudicating authority at Para 29 of the order, in respect of Notfn. no. 67/95 - C.E. dated 16.03.1995 that a final product when wholly exempt from payment of duty then the duty on inputs that had gone into its manufacture gets automatically exempt is incorrect. The adjudicating authority has further observed that "Conversely, when final product is dutiable, the duty payable thereon includes the duty already paid on the inputs. That is why, in cases where duty paid inputs have been procured from outside and input duty credit taken, a part of the duty on final products is paid through CENVAT Credit account (duty paid on inputs) and partly through PLA (duty on the final product to the extent of the value added). That is why the integrated units availing benefit of Notfn. no. 67/95 - C.E. dated 16.03.1995 in respect of inputs captively consumed are not required to pay duty on inputs even where final product made out of those inputs is exempt".
These observations are against the conditions specified in Notfn. no. 67/95. The said Notfn. no. 67/95 specifically excludes all the inputs used in or in relation to the manufacture of final products which are exempt from the whole of duty of excise leviable thereon or are charged to NIL rate of duty.
the adjudicating authority basically erred in treating the impugned goods i.e. Long Residue and Refinery Gases, as "inputs", when the two impugned goods were actually final products which were manufactured during the refinery process. The adjudicating authority itself has held the two impugned goods to be excisable and classified Long 8 E/3074/2006 Residue in Ch.S.H.No.2713.30 and Refinery Gases in Ch.S.H.No.2711.19 respectively. The correct terminology to treat the two impugned goods would be "intermediate goods" (since they were captively consumed for further manufacture of final exempted product "LSHS") and not "inputs" as interpreted by the adjudicating authority. Therefore, once the two impugned goods were "intermediate goods", they also do not qualify as "inputs" and therefore are not eligible for the condition specified in Notfn. no. 67/95.
the reference to Rule 6(3)(b) of the CENVAT Credit Rules, 2001/2002/2004 in Para no. 29 of the order and its applicability in the instant matter is erroneous and incorrect. When the two impugned goods were definitely not "inputs" and were held as excisable final goods by the adjudicating authority itself, then the reversal of CENVAT of common inputs and payment of 10% of the price of exempt of final products does not arise. In fact, these two impugned final products were captively consumed and since no duty was paid on them, no CENVAT credit was also availed. Therefore, applicability of Rule 6(3)(b) of the CENVAT Credit Rules, 2001/2002/2004 could not even remotely be allowed. In fact, the adjudicating authority incorrectly and erroneously took cognizance of assessees hypothetical stance about applicability of Rule 6 of the CENVAT Credit Rules, 2001/2002/2004. In fact, as discussed earlier, the application of Rule 6 ibid would have been relevant only when CENVAT credit was a issue of dispute. The issue in the impugned matter clearly pertained to 'dutiability of the two impugned goods i.e. Long Residue and Refinery gases and availment of CENVAT on inputs or common inputs was not at all a subject matter of the show cause notice.
CBEC vide Circular no. 692/08/2003 dated 13.02.2003 has enumerated the general principles for valuing the goods which are captively consumed. In the circular, Captive Consumption has been defined as "the consumption of goods manufactured by one division or unit and consumed 9 E/3074/2006 by another division or unit of the same organization or related undertaking for manufacturing another products. The two impugned products are never disputed to be captively consumed in the manufacture of another product i.e. "LSHS".
The adjudicating authority also erred in referring the demand as time barred in as much as only the SCN dated 04.02.2003 was issued by invoking the proviso to Section 11A(1). The other Nine Show Cause Notices were issued well with the prescribed period of one year and the bar of limitation was not rightly applicable;
4.1 We have heard Shri S K Mathur, Special Counsel for the revenue and Shri Gajendra Jain, Advocate for the respondent.
3.2 Arguing for the revenue learned special counsel submits that:
"Long Residue" (LR) is classifiable Chapter Heading 2713.30 and "Refinery Gas" is classifiable under Chapter sub-heading 2711.19 of the Central Excise Tariff Act, 1985, therefore, undisputedly excisable goods within the meaning of Section 2(d) of the Central Excise Act, 1944. both the impugned goods, namely, LR & RG emerge in the course of refining of crude oil, it is thus manufacture within the meaning of Section 2 (f) of the Central Excise Act and that the assessee has not disputed the nature of the impugned goods being manufactured.
Commissioner finding that in absence of known sale or purchase of the impugned goods leads to the inevitable conclusion that the impugned goods are not marketable and hence the impugned goods are not liable to excise duty.
when the impugned goods are meant entirely for captive consumption, the question of their actual sale or purchase is not relevant and the Department is not required to prove their marketability.
Respondent had been filing classification Declaration under rule 173 B of the Central Excise Rules, 1944. In that the assessee was showing 'Refinery Gas', one of the impugned 10 E/3074/2006 goods classifiable under sub-heading 2711-19 for captive consumption under claim for exemption under Notification No. 67/95-C.E. Two of the classification Declarations filed under Rule 173B-one dtd. 4/6/1998 (Page 5 to 13 of PB-III) and another dtd. 19/3/2001(Page 47 to 53 of Paper Book Vol.
II) clearly show that respondents themselves considered the products to be excisable.
Respondent did not file any classification declaration for Long Residue (LR). But that does not imply that it is not marketable. It is undoubtedly marketable and it is internationally known as a marketable commodity. In the grounds of appeal, the Department has relied upon numerous internet materials to show that LR is a marketable commodity known to the commercial world. Some more are listed as below :
o A tender dtd. 30/7/2019 for supply of cracking residue (and Long residue) downloaded from (https://www.go4worldbusiness.com).
o Website Print-out dtd. 31/7/2019 showing Orpic Fuel Products in Oman including Low Sulfur Gas Oil, Long Residue and Bunker Fuel Oil, Diesel, Kerosene, Jet A-1, Liquid Petroleum Gas etc. downloaded from (https://www.pizzeriareporter).
o Website Print-out under the caption 'Oman'
downloaded from
www.gettingthedealthrough.com also shows
various petroleum products including long
residue.
'marketability' is essentially a question of fact to be decided in the facts of each case. The fact that the goods are not in fact marketed is of no relevance. So long as the goods are marketable, they are goods for the purposes of Section 3 of the Central Excise Act, 1944 as held by the Hon'ble Supreme Court in the case of A. P. State Electricity Board Vs. Collector of Central Excise, Hyderabad - 1994 (70) ELT (3).
excise duty is on the manufacture of goods and not on sale as held by the Hon'ble Apex Court in the case of Union of 11 E/3074/2006 India Vs. Delhi Cloth & General Mills Co. Ltd. - 1977 (1) ELT (J 199) S.C. the impugned goods are marketable and hence excisable. Just because the impugned goods are captively consumed for manufacture of LSHS and are not sold outside, that does not mean that the impugned goods are not marketable.
in a somewhat similar case of the assessee where the assessee captively consumed Long Residues and Refinery Gases in the manufacture of fully exempted product, LSHS, the question of marketability was not raised. In that case, the Tribunal vide its un reported Order No. A/1638/WZB/2004/CI dtd. 29/9/2004 sustained the demand, but remitted the matter with the direction for re- quantification of the demand.
Commissioner has extended the benefit of exemption under Notification No. 67/95 C.E. dtd. 16/3/95. On a careful examination of the notification, it would be quite clear that the intermediate goods manufactured and used within the factory of production for manufacture of dutiable final products will be entitled to the benefit of this notification. However, as per proviso to this notification, this benefit will not be available to intermediate goods used in the manufacture of final products which are wholly exempt or are chargeable to nil rate of duty. As the intermediate goods, viz. Long residue and refinery gases have been manufactured and used in the manufacture of LSHS cleared by the assessee at nil rate of duty under various notifications from time to time. Therefore the benefit of the notification No.67/95-C.E. in respect of the long residues and refinery gases as per the proviso to the notification is not admissible.
Respondents contend that the proviso to the notification is not applicable to their case. Its case is covered by the exception clause (vi) to the notification inasmuch as it has discharged the obligation prescribed in Rule 6 of the Cenvat Credit Rules, 2001. On a careful reading of this exception clause (vi), it would be quite apparent that this exception clause (vi) will be available only to an assessee 12 E/3074/2006 who is a manufacturer of both dutiable and exempted final products and who has discharged the obligation in Rule 6 of the Cenvat Credit Rules, 2001. It is needless to say that an assessee who is availing the facility of Cenvat Credit Rules can only discharge the obligation prescribed in Rule 6 of the Cenvat Credit Rules, 2001.
Sub-rules in rule 6 are not alternative to each other. They are complimentary to each other. They have to be read together and when so read, it would be quite clear that the assessee has not discharged the obligation prescribed in Rule 6 of the Cenvat Credit Rules, 2001.
The present proceedings are concerned only with 'long residue' and 'refinery gases' used in the manufacture of exempted LSHS. It has not been shown whether long residue and refinery gases have been used in the manufacture of any other dutiable products. The assessee has also not maintained any separate accounts for receipt, consumption and inventory of inputs meant for use in the manufacture of dutiable final products and exempted final products. It has also not paid 8% of the sale value of the exempted final product at the time of their clearance from the factory. Therefore, the claim of the assessee that it has discharged the obligation prescribed in Rule 6 of the Cenvat Credit Rules, 2001 is devoid of any merit. Respondent has taken modvat credit only in respect of 5 inputs, namely, Sulfolane, MTBE, Mercaptan, Methanol and Octane Booster which are not used in the manufacture of exempted LSHS. Therefore, the obligation prescribed under Rule 6 of the Cenvat Credit Rules, 2001 has been discharged. When the assessee claims that it has not availed the Cenvat Credit facility in respect of LSHS, the question of discharging the obligation u/r 6 of CCR, 2001 cannot and does not arise. Therefore, the assessee ought to have paid duty on the long residue and refinery gases used in exempted LSHS.
Respondent contended that in their own case reported at [2014 (310) ELT 906 (T)] the Tribunal has held that after 1/7/2001 the benefit of notification No.67/95-C.E. is available to the assessee if no input duty credit is availed 13 E/3074/2006 in respect of intermediate goods used in the manufacture of exempted final products. On a careful reading of this decision, it is seen that the assessee manufactured, amongst others, two petroleum products, namely, Bombay High Gas Oil (BHGO) and Naphtha which emerged in the process of crude oil distillation. These two products were used as fuel in the captive power plant for generation of electricity. The electricity so generated in the captive power plant was used within the factory premises for manufacture of both dutiable and exempted goods. The Department was of the view that BHGO and Naphtha consumed in the captive power plant for generation of electricity are liable to excise duty, when such goods are used in the manufacture of exempted final products. Accordingly, show cause notices were issued demanding duty of excise covering the period December, 1998 to December, 2011. Duty demands were confirmed in adjudication. In appeal before the Tribunal, the Tribunal held that prior to 1/7/2001, duty demand would not sustain as the Refinery was deemed warehouse. However, after 1/7/2001, the appellant would be liable to pay excise duty and the benefit of Notification No.67/95-C.E. would be available to BHGO and Naphtha subject to the condition that no input duty credit has been availed in respect of BHGO and Naphtha used in the manufacture of exempted final products. It is submitted that the ratio of this decision will not apply to the present case where the facts are clearly distinguishable.
In the case of Ambuja Cement Ltd. [2015 (326) ELT 13 (S.C.)] Hon'ble Apex Court has dealt with the relevant notification No.67/95-C.E. Briefly stated, in that case the appellant-assessee was the manufacturer of 'Clinker' and 'Cement'. Clinker, an intermediate product was utilised in the manufacture of Cement. Clinker was dutiable, while Cement was exempt under Notification No. 50/2003-CE dtd. 10/6/2003. The appellant claimed exemption from duty in respect of 'Clinker under Notification No. 67/95-CE dtd. 16/3/1995. There was no dispute that the appellant had discharged the obligation prescribed in Rule 6 of the 14 E/3074/2006 Cenvat Credit Rules. The Hon'ble Apex Court found that the appellant was the manufacturer of both dutiable and exempted final products and had discharged the obligation in Rule 6 of the Cenvat Credit Rules, 2001, thereby satisfying the exception clause (vi) of the proviso to the notification. Hence it was held that the appellant was eligible for the benefit of the notification. Ratio of this judgment supports the case of the revenue rather than that of the assessee inasmuch as the assessee in the present case has not shown that at the relevant time it was the manufacturer of both dutiable and exempted goods in relation to long residue and refinery gas. So far as demand of duty prior to 1/7/2001 is concerned, as per Board's Circular dtd. 27/4/1967, no duty was leviable on the intermediate goods so long as they were not cleared outside the refinery (deemed warehouse) in terms of Rule 143A of the erstwhile Central Excise Rules, 1944. However, in terms of Rules 9 and 49 of the said Rules, intermediate goods captively consumed for further manufacture of any other commodity were liable to duty of excise even prior to 1/7/2001 when the new Central Excise Rules, 2001 were brought into force by replacing the erstwhile Central Excise Rules, 1944.
Out of 10 show cause notices, only the 1st show cause notice dtd. 4/2/2003 covering the period from Jan. 1998 to June 2001 invoked the extended period of limitation. The remaining 9 show cause notices were issued well within the normal period of limitation.
3.3 Arguing for the respondent, learned counsel submits:
The Committee on Disputes in their meeting held on 10.5.2007 (page 1 of Vol. III) had declined permission to CBEC to pursue appeal before the CESTAT in the present matter.
Additional evidence on marketability cannot be placed on record without filing application under Rule 23 of CESTAT (Procedure) Rules, 1982.
o Kay Iron Works Pvt. Ltd[ 2008 (232) ELT 412 (Bom.)] 15 E/3074/2006 o City Lubricants Pvt. Ltd. [2009 (239) ELT 70 (T)] o Industrial Security Service [2007 (8) STR 178 (T)] Prakash Pipes & Industries Ltd. [1993 (68) ELT 779 (T)] Revenue has not filed any application before this Hon'ble Tribunal for placing any additional evidence on record. In the absence of proper procedure being followed, the additional evidence in the form of website printouts submitted by the Revenue along with the appeal / synopsis (across the bar) is liable to be rejected.
Application for placing additional evidence on marketability on record, if any, is liable to be dismissed for want of sufficient cause.
o Respondents in their reply dated 19.10.1996 to the audit objection (page 33 of Vol. II filed by Revenue) had disclosed the entire factual position. The department therefore should have brought evidence on record to prove marketability while issuing the first show cause notice in February 2003. The department therefore could have very well produced evidence to prove marketability of LR & RG while issuing the subsequent show cause notices, if not earlier. Having not done so, in spite of several opportunities, the department is precluded from producing the additional evidence on marketability at this stage, as has been held in
(i) Kulkarni Black And Decker Ltd [ 1992 (57) ELT 401 (Bom.)]
(ii) Prakash Pipes & Industries Ltd. [1993 (68) ELT 779 (T)]
(iii) Vaigai Thread Processors Ltd. [2004 (169) ELT 82 (T)]
(iv) Industrial Security Service [2007 (8) STR 178 (T)] Review order as well as the Revenue's appeal is beyond 'record'. Hence, Revenue's appeal is liable to be dismissed. Test of marketability has not been satisfied. Hence, demand cannot be sustained, as has been held in o Moti Laminates Pvt. Ltd. [1995 (76) ELT 241 (SC)] 16 E/3074/2006 o Hutchison Max Telecom P. Ltd. - 2008 (224) ELT 191 (Bom.) o O.K. Play (India) Ltd. [2005 (180) ELT 291 (SC)] o Camlin Ltd. Vs. CCE [2005 (180) ELT 307 (SC)] o Bata India Ltd. Vs. CCE - 2010 (252) ELT 492 (SC) Website printouts relied upon by Revenue are irrelevant and inadmissible. In any case, not a single printout suggests actual sale of LR & RG.
o The additional evidence in the form of website printouts now being produced by the department is not sourced from any authoritative technical textbook but are mere website printouts. Website printouts cannot be relied upon as evidence and must be rejected. Kindly refer: Ponds India Ltd. - 2008 (227) ELT 497 (SC) (page 69 of Vol. IV). o The Revenue in its appeal before the CESTAT as well as synopsis has relied upon website printouts in support of its contention that LR & RG are marketable goods. However, none of the printout relied upon by the revenue prove that there is actual sale of LR & RG. The Revenue is relying on random and motley collection of website printouts to allege marketability. This is nothing but an attempt to make mockery of entire judicial and adjudication proceedings.
Revenue is relying upon respondents' letters dated 4.8.1998 & 11.1.2003 and declarations filed under Rule 173B of the erstwhile Rules to contend that LR & RG are marketable goods. There is no estoppel in law against a party in taxation matters as held by the Apex Court in Dunlop India Ltd. & Madras Rubber Factory Ltd. Vs. UOI & Others - 1983 (13) ELT 1566 (SC).
Demand for the period prior to 1.7.2001 is not sustainable as the same has not been disputed by the Revenue in its grounds of appeal.
In any case, for the period prior to 1.7.2001, LR & RG are not liable to excise duty in view of the warehousing provisions & settled legal position.
17 E/3074/2006 For the period after 1.7.2001, LR & RG are not liable to excise duty in view of Notification No.67/95-CE dated 16.3.1995. Respondents have not availed CENVAT Credit in respect of the inputs used in the manufacture of LSHS cleared by them under exemption. Therefore as per the ratio of the decisions as follows, they benefit under Notification 67/95 is admissible to them. o Hindustan Petroleum Corporation Ltd. [2013 (287) ELT 102 (T)] o Ambuja Cement Ltd. [2015 (326) ELT 13 (SC)] o Godavari Sugar Mills Ltd. [2007 (212) ELT 234 (T)] Affirmed in 2015 (319) ELT A69 (Kar.) o Sakthi Sugars Ltd. [2008 (230) ELT 676 (T)] Affirmed in 2016 (332) ELT A194 (SC) o Funskool India Ltd [2009 (244) ELT 591 (T)] o Funskool India Ltd. [2017 (357) ELT 434 (T)] o Lanco Industries Ltd. [2008 (227) ELT 395 (T)] o Bhushan Steel & Strips Ltd. [ 2015 (326) ELT 729 (T)] It is settled law that demand for the extended period of limitation is sustainable only when suppression of facts with intent to evade duty is proved beyond reasonable doubt.
5.1 We have considered the impugned order along with the submissions made in appeal and during the course of argument on appeal.
5.2 Undisputedly Respondents are Public Sector Undertaking, and in their refinery produce various petroleum products> During the course refining of crude oil two products namely "Refinery gas" and "Long Residue" also arise. These are consumed by the appellants in further manufacture of LSHS oil, which has been cleared by them to electricity generating utilities without payment of duty following the procedure as prescribed. The case against the respondent is in respect of demand of duty on these two products. Essentially, this case involves the determination of following issues:
I. Whether the impugned goods are marketable and therefore dutiable.
18 E/3074/2006 II. Whether the exemption under notification 67/95 was admissible to the impugned goods Whether the impugned goods are marketable and therefore dutiable 5.3 On the issue of excisablity and dutiability Commissioner has in impugned order recorded his findings as follows:
"11. Any enquiry to ascertain whether any goods are dutiable or not, must commence with Section 3 of the CEA which authorizes the levy and collection of Central Excise duty. This Section, in a nut-shell, provides for levy and collection of duty in a prescribed manner on excisable goods which are produced or manufactured in India as, and at rates, set forth in the First/Second Schedule to the Central Excise Tariff Act, 1985, i.e. the Tariff. 10 these prerequisites under Section 3, Hon'ble Supreme Court in several landmark judgements has added another, the marketability of goods.
12. Thus for any goods to be dutiable in terms of Section 3 CEA, they must be:
(a) excisable goods; and
(b)produced or manufactured in India.
(c) marketable.
Do the impugned goods satisfy these three tests? Let us examine.
13. Section 2(d) CEA defines 'excisable goods' as goods specified in the First Schedule to the Central Excise Tariff Act 1985 as being subject to duty of excise. Between the impugned goods, LR fell during the relevant period under Chapter subheading 2713.30 and RG under 2711.19 of the Tariff. This classification was clearly spelt out in the show cause notices and the noticee has not disputed it. The impugned goods are, therefore, undisputedly excisable goods within the meaning of Section 2(d) of CEA.
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14. Section 2(1) of CEA defines manufacture to include inter alia any process incidental or ancillary to the completion of a manufactured product. Both the impugned goods, viz. LR and RG, emerge in the course of refining of crude oil, into several products falling under Chapter 27 and 29 of the Tariff. Refining is the principal process that brings into existence all these products including the impugned goods. As this process leads to the emergence completion of the impugned goods, it is a manufacture within the meaning of Section 2(f) CEA. It is noteworthy that the noticee has not disputed the nature of impugned goods being manufactured.
15. What the noticee has, however, disputed is the marketability of these goods. They have contended that neither of the impugned goods are marketable and as per the law laid down by the apex Court, therefore, these are not liable to excise duty. The noticee has further argued that the burden to prove the marketability of the impugned goods was on the Department. They have placed reliance on several decisions of the apex court enumerated in para 9 (A) (vi) supra.
16. In Hindustan Petroleum Corporation Ltd. vs. Union of India, reported in 1999 (112) ELT 8 (SC), dutiability of burner fuel oil was in dispute. Like LR of the noticee, burner fuel oil was also a residue which remained in the distillation column in the refinery after the crude oil had been processed and better known products taken out. Referring to apex court's earlier decisions in AP State Electricity Board vs. CCE (1994 (70) ELT 3(SC) and Indian Cable Company Ltd. Vs. Collector of Central Excise (1991 (74) ELT 22 (SC), the Hon'ble Supreme Court reiterated the test of marketability laid down in those two cases.
"Marketability is a decisive test for dutiability. It only means saleable or suitable for sale. It need not be even marketed. The article should be capable of being sold to the consumers in the market, as it is - without anything more."
17. The Hon'ble. Court had also observed that the burden was on the department to prove marketability of the residual substance and if the department failed to prove so, duty was not leviable.
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18. In none of the ten show cause notices under this adjudication, marketability of the impugned goods has been asserted or substantiated. In fact, it has not been even mentioned. Therefore, to find out whether such LR and RG being produced by other refineries were being marketed or whether these were being into India, information was sought from the following.
i. Deputy Commissioner of Customs, Oil Unit, Mumbai Custom House who is in charge of all oil imports at Mumbai.
ii. D.Cs Central Excise, Cochin Jamnagar and Mangalore in whose jurisdiction are located refineries of three different companies namely M/s Kochi Refineries, M/S Reliance Industries and M/S MRPL respectively None of the above officers reported imports from abroad or removals of the LR and RG from these refineries.
19. These reports from jurisdictional Assistant Commissioners of refineries and Mumbai Custom House prima facie indicated that the impugned goods were not being marketed. Although as per the observations of the apex court actual marketing of goods was not essential to judge their marketability, their saleability or suitability of sale was. Yet actual sale and purchase was a clear indicator of saleability for in Camplin Ltd. vs. Commissioner (2005 (180) ELT 308(SC) and Okay Play (India) vs. Commissioner of Central Excise (2005 (180) ELT 291(SC)}, it had been held that marketability was a question of fact and any actual sale / purchase or import/export was enough to establish marketability.
20. The noticee's claim that the impugned goods were not marketable, further buttressed by absence of known sale / purchase on ground and the total silence of the show cause notices on the issue lead in the absence of any other evidence to the contrary, only to one inevitable conclusion that the impugned goods are not marketable."
21 E/3074/2006 5.4 The threefold test to determine the dutiability of the goods that Commissioner has referred in his order cannot be disputed as these have been laid down by the Hon'ble Apex Court since ages. These are the basic tests before any goods can be subjected to excise duty. If the reply to any of the test is negative then the goods cannot be subjected to duty of excise under the Central excise Act, 1944.
5.5 Undisputedly the test of manufacture as per section 2(f) of Central Excise Act, 1944 and excisablity as per Section 2(d) is satisfied. The whole issue that needs to be determined is vis a vis the marketability of the impugned goods. Show Cause Notice issued to respondent, were silent on this aspect of marketability, so Commissioner himself conducted enquiries from the independent sources and on the basis of the enquiries conducted concluded that the impugned goods are not marketable and hence not dutiable. In our view Commissioner was not required to take such an exercise and it was the investigating authority or the authority who had issued the show cause notice who should have conducted such enquiries from as many sources they desired and establish that these goods were marketable. Having not done so, in the appeal, revenue cannot default the enquiries conducted by the Commissioner. It is also settled legal position that burden to prove marketability is on the department and in the absence of any evidence being led in by the department to show that the goods in question are capable of being bought and sold, demand cannot be confirmed. In case of Hindustan Ferodo Ltd [1997 (89) ELT 16 (SC)} Hon'ble Supreme Court has observed as follows:
"2.The Tribunal referred, in the order under appeal, to process drawings and came to the conclusion that the duty was sought to be levied at the fourth stage of manufacture in the appellants' factory. The samples of the said rings, which were shown to the Tribunal, arose after this stage. They were in a finished form. There was nothing elementary or crude about them. As asbestos products, they were fully manufactured. Nothing further was required to be done to make them fully manufactured asbestos products. The appellants' contention that the said rings were brittle and fragile articles and hence not marketable "was simply 22 E/3074/2006 not true. We examined the sample of the rings very carefully. Asbestos fibre is a very strong material. If the ring is allowed to fall on the floor, nothing would happen to it. We found it neither brittle nor fragile. It was perfectly capable of being handled and transported for marketing". In so far as the aforementioned affidavits were concerned, the Tribunal observed that the deponents were "not the right persons to give opinion on the type of the products with which we are concerned in this case. The disputed products are industrial goods. Only industrialists engaged in the manufacture of brake linings and clutch facings would be interested in them and not a dealer who sells commonly used asbestos products in the market". The Tribunal went on to state, "Any small scale or medium scale manufacturer of brake linings and clutch facings would be interested in buying the asbestos rings and asbestos fabrics as his starting materials, if he does not have the resources to start from the stage one (the asbestos fibre stage).......... The fact that the appellants do not sell their asbestos rings and asbestos fabrics is immaterial......... The material point is that their asbestos rings and fabrics are marketable products, though marketable to a particular section of the industry only......... The articles in dispute before us are high value finished asbestos products and if the terms offered are right the smaller manufacturers of brake linings and clutch facings would certainly be interested in buying them".
3.It is not in dispute before us, as it cannot be, that the onus of establishing that the said rings fell within Item 22F lay upon the Revenue. The Revenue led no evidence. The onus was not discharged. Assuming therefore, that the Tribunal was right in rejecting the evidence that was produced on behalf of the appellants, the appeal should, nonetheless, have been allowed.
4.It is not the function of the Tribunal to enter into the arena and make suppositions that are tantamount to the evidence that a party before it has failed to lead. Other than supposition, there is no material on record that suggests that a small scale or medium scale manufacturer of brake linings and clutch facings "would be interested in 23 E/3074/2006 buying" the said rings or that they are marketable at all. As to the brittleness of the said rings, it was for the Revenue to demonstrate that the appellants' averment in this behalf was incorrect and not for the Tribunal to assess their brittleness for itself. Articles in question in an appeal are shown to the Tribunal to enable the Tribunal to comprehend what it is that it is dealing with. It is not an invitation to the Tribunal to give its opinion thereon, brushing aside the evidence before it. The technical knowledge of members of the Tribunal makes for better appreciation of the record, but not its substitution."
5.6 Be that as it may be revenue has in the appeal sought to adduce the evidence from the numerous websites to show that the impugned goods have some possible use or are capable of being use, but they have not produced any evidence about the marketability of the said goods at the relevant time. Marketability is not synonymous with usability. Certain goods may be usable but just because they are usable, would determine the existence of the market for the said goods. In the case Moti Laminates Pvt. Ltd [1995 (76) ELT 241 (SC)], Hon'ble Supreme Court has observed as follows:
"6. The duty of excise is leviable under Entry 84 of List I of the VIIth Schedule on goods manufactured, or produced. That is why the charge under Section 3 of the Act is on all, 'Excisable goods', 'produced or manufactured'. The expression 'excisable goods' has been defined by clause (d) of Section 2 to mean, "goods' specified in the Schedule. The scheme in the Schedule is to divide the goods in two broad categories - one, for which rates are mentioned under different entry and other the residuary. By this method all goods are excisable either under the specific or the residuary entry. The word 'goods' has not been defined in the Act. But it has to be understood in the sense it has been used in Entry 84 of the Schedule. That is why Section 3 levies duty on all excisable goods mentioned in the Schedule provided they are produced and manufactured. Therefore, where the goods are specified in the Schedule they are excisable goods but whether such goods can be subjected to duty would depend on whether they were produced or manufactured by the person on 24 E/3074/2006 whom duty is proposed to be levied. The expression `produced or manufactured' has further been explained by this Court to mean that the goods so produced must satisfy the test of marketablity. Consequently it is always open to an assessee to prove that even though the goods in which he was carrying on business were excisable goods being mentioned in the Schedule but they could not be subjected to duty as they were not goods either because they were not produced or manufactured by it or if they had been produced or manufactured they were not marketed or capable of being marketed.
7. The duty of excise being on production and manufacture which means bringing out a new commodity, it is implicit that such goods must be useable, moveable, saleable and marketable. The duty is on manufacture or production but the production or manufacture is carried on for taking such goods to the market for sale. The obvious rationale for levying excise duty linking it with production or manufacture is that the goods so produced must be a distinct commodity known as such in common parlance or to the commercial community for purposes of buying and selling. Since the solution was produced could not be used as such without any further processing or application of heat or pressure, it could not be considered as goods on which any excise duty could be levied."
5.7 In case of Tata Iron and Steel Co Ltd. [2004 (165) ELT 386 (SC)], Hon'ble Supreme Court further stated as follows:
"22.In our opinion, this Court in Indian Aluminium Co. Ltd. (supra) has held that merely selling does not mean dross and skimming are marketable commodity as even rubbish can be sold and everything, however, which is sold is not necessarily a marketable commodity as known to commerce and which, it may be worthwhile to trade in. The issue involved in this case is governed by the past decisions of the Tribunal and also of this Court where the Tribunal and this Court held that the zinc dross and skimming arising as refuse during galvanisation process are not excisable goods. The Tribunal, in our opinion, has rightly relied upon the decision of this Court in Indian Aluminium Co.
Ltd. (supra) and in view of the above decision of the Tribunal following this Court's opinion in Indian Aluminium Company 25 E/3074/2006 Limited (supra), we disagree with the appellant's that zinc dross, flux skimming and zinc scallings are goods and hence excisable".
5.7 In case of Lupin Limited [2013 (293) ELT 354 (Guj)], Hon'ble Gujarat High Court held as follows:
"25.The test to be applied in ascertaining whether a product would be exigible to excise duty, one of the important aspects is its marketability. What is to be ascertained is not merely that a product is manufactured, but that it is also marketable. On this point, there is clearly no dispute. Several decisions cited before us of the Apex Court bring about such a legal proposition. It is also well settled that merely because the product is mentioned in one of the entries in the Central Excise Tariff Act or finds place in the notification issued for the purpose of claiming duty drawback under the customs law, by itself would not be conclusive of the fact that such produce is either marketable or that, therefore, it is exigible to excise duty.
26.In case of Bata India Ltd. v. Commissioner of Central Excise, New Delhi (supra), the Apex Court observed as under :
"18. Revenue in this case has not succeeded in establishing that the product in question was either marketed or was capable of being marketed. The test of marketability is that the product which is made liable to duty must be marketable in the condition in which it emerges. No evidence has been produced by the Revenue to show the product unvulcanized sandwiched fabric as such as is capable of being marketed, without further processing. The question is not whether there is an hypothetical possibility of a purchase and sale of the commodity but whether there is sufficient proof that the product is commercially known. The mere fact that the product in question was entrusted outside for some job work such as stitching is not an indication to show that the product is commercially distinct or marketable product. Without proof of marketability the intermediate product would not be goods much less excisable goods. Such a product is excisable only if it is a complete product 26 E/3074/2006 having commercial identity capable of being sold to a consumer which has to be established by the Revenue."
27. The Apex Court, thus, was of the opinion that mere hypothetical possibility of a purchase and sale of the commodity is not sufficient proof that the product is commercially known.
28.In case of Union of India and Others v. Sonic Electrochem (P) Ltd. and Another, reported in (2002) 7 SCC 433 = 2002 (245) E.L.T. 274 (S.C.), the Supreme Court observed as under :
"8. We do not consider it necessary to discuss the cases on the question of marketability, as this Court has dealt with all relevant cases in A.P. SEB case. In that case, the question was whether electric poles manufactured with cement and steel for the appellant Board were marketable. After considering various cases on the question of marketability of goods, Jeevan Reddy, J., speaking for the Court, summed up the position thus :
"10. It would be evident from the facts and ratio of the above decisions that the goods in each case were found to be not marketable. Whether it is refined oil (non-deodorised) concerned in Union of India v. Delhi Cloth and General Mills Co. Ltd. or kiln gas in South Bihar Sugar Mills Ltd. v. Union of India or aluminium cans with rough uneven surface in Union Carbide India Ltd. v. Union of India or PVT films in Bhor Industries Ltd. v. CCE or hydrolysate in CCE v. Ambalal Sarabhai Enterprises (P) Ltd., the finding in each case on the basis of the material before the court was that the articles in question were not marketable and were not known to the market as such. The 'marketability' is thus essentially a question of fact to be decided on the facts of each case. There can be no generalization. The fact that the goods are not in fact marketed is of no relevance."
9. It may be noticed that in the cases referred to in the passage, quoted above, the reasons for holding the articles "not marketable" are different, however, they are not exhaustive. It is difficult to lay down a precise test to determine marketability of articles. Marketability of goods has certain attributes. The essence of marketability is neither in the form nor in the shape or condition in which the manufactured articles are to be found, it is the commercial identity of the articles known to the market 27 E/3074/2006 for being bought and sold. The fact that the product in question is generally not being bought and sold or has no demand in the market would be irrelevant. The plastic body of EMR does not satisfy the aforementioned criteria. There are some competing manufacturers of EMR. Each is having a different plastic body to suit its design and requirement. If one goes to the market to purchase the plastic body of EMR of the respondents either for replacement or otherwise one cannot get it in the market because at present it is not a commercially known product. For these reasons, the plastic body, which is a part of EMR of the respondents, is not "goods" so as to be liable to duty as parts of EMR under para 5(f) of the said exemption notification."
29.In case of Cadila Laboratories Pvt. Ltd. v. Commissioner of Central Excise, Vadodara (supra), the Apex Court referred to several decisions and observed as under :
"9. Thus, the law is that in order to be excisable, not only goods must be manufactured i.e. some new product brought into existence, but the goods must be marketable. By marketable it does not mean that the goods must be actually bought and sold in the market. But the goods must be capable of being bought or sold in the market. The law also is that goods which are in the crude or unstable form and which require a further processing before they can be marketed, cannot be considered to be marketable goods merely because they fall within the Schedule to the Excise Act."
30. In case of Ladli Construction Company Private Limited v. Punjab Police Housing Corporation Limited and Others, reported in (2012) 5 SCC 609, the Supreme Court observed as under :
"29. Except raising the vague and general objections that the arbitrator was biased and had predisposition to decide against the contractor, no materials, much less cogent materials, have been placed by the contractors to show bias of the arbitrator. No sufficient reason appears on record as to why the arbitrator should not have proceeded with the arbitral proceedings. The test of reasonable apprehension of bias in the mind of a reasonable man is not satisfied in the factual situation."
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31. The law on the point, therefore, is sufficiently clear i.e. for the Department to levy excise duty on the product in question, it would have to establish that the product itself is marketable. It is equally settled that while doing so, the chemical being stable would not be conclusive, but only one of the aspects. In case of Cadila Laboratories Pvt. Ltd. (supra), the Supreme Court while accepting that this new product may be stable, refused to uphold the Department's stand that it is marketable without any other evidence on record.
32.In the present case, having first issued show cause notice in the year 1986 and having lost up to the level of the Tribunal, the Department has issued second show cause notice. The decision of the Tribunal in the first round of litigation achieved finality. In the present case, under the fresh show cause notice impugned in this petition, the respondents seek to levy excise duty on the same product virtually on the same grounds. Only additional material, if one may so hold, is the chemical examination to suggest that the product is stable. The Department also heavily relies on the patent issue by U.S. Office to contend that the product being identical, should be held exigible to excise. Other than these two factors, we find virtually no further evidence collected by the Department to subject the petitioners to fresh round of litigation. We may deal with these two questions presently.
33. Insofar as the opinion of the chemical examiner that the product is stable, that by itself as held by the Apex Court in the case of Cadila Laboratories Pvt. Ltd. (supra), would not be conclusive. What is required to be ascertained was whether such product is marketable. In other words, the product was known in the market and that it was possible to be bought and sold in the market. Mere hypothetical possibility of some availability in the market by itself would not be sufficient. The Department's stand, therefore, that merely because chemically the product is found to be stable, in our view, cannot be stated to be new or sufficient material to enable the Department to hold the view that such product is marketable."
29 E/3074/2006 5.8 Revenue has vehemently relied upon the web printout which do not establish the marketability of the impugned goods but only establish that the impugned goods are capable of being used in production of goods. These print outs only talk of emerging technologies. Three print outs of the year 2019, have been produced during the course of arguments to establish the marketability of the impugned goods. In our view the entire reliance placed by the revenue on the web material to establish marketability is devoid of any merits, and these web print outs cannot be relied in evidence at the stage of appeal or arguments as the marketability is not only a question of fact but is also very dynamic. With emergence of new technologies, products which were never marketable earlier may become marketable subsequently or the products which are marketable today may go in oblivion on a later date. The marketability for the purpose of levy of excise duty needs to be determined at the relevant time and evidences to that effect need to be adduced. Web- material is only hypothetical and also dynamic. Reliance placed on the web material as late as of 2019, to establish marketability during the period 1996 to 2005 cannot be accepted as evidence in any judicial proceedings. Hence we do not admit the web print outs of the subsequent date as the evidence to establish the marketability of the impugned goods.
5.9 Revenue has relied upon one un-reported order [Order No A/1638/WZB/2004/CI dtd. 29/9/2004] to support their case. In that case tribunal has in para 7 observed as follows:
"7. On merits, we hold that demand is sustainable in view of the fact that the show cause notice is confined to recovery of credit to the extent that Long Residues and Refinery Gases have been used in the manufacture of fully exempted products and recovery of credit on inputs used in LSHS is confined to that quantity of inputs used in the manufacture of LSHS cleared to TATA at Nil rate of duty, which was subsequently used for power generation, which is not excisable. However, the appellants state that the entire amount of credit taken by them during the dispute under is not Rs.39.82 crores on the basis of which, 10.1653% was worked out but to Rs.27.84 crores, as seen from the certificate issued by the Range Superintendent. They further 30 E/3074/2006 submit that some of the inputs, for example Sulfolene on which credit has been denied, was not used in the production of LSHS and therefore; credit was rightly availed on those inputs, which were solely used in the manufacture of dutiable products. The appellants raised defence at the time of filing reply to show cause notice, but no finding has been recorded by the Commissioner."
From the above it is observed that the issue in the case under consideration before the tribunal was not on the marketability and dutiability of the impugned goods. Hence the said decision is clearly distinguishable.
5.9 In view of discussions as above in our view revenue having failed to establish marketability of the impugned goods in the present ten show cause notice which have been adjudicated as per the impugned order cannot succeed on the leviability of duty of excise on the impugned goods. Since the appeal of revenue cannot succeed on this ground, the other issues and ground of admissibility of exemption under Notification No 67/95-CE etc. need not be considered.
6.1 The appeal filed by the revenue is dismissed.
(Order pronounced in the open court) (Sanjiv Srivastava) Member (Technical) (Dr. Suvendu Kumar Pati) Member (Judicial) tvu