Custom, Excise & Service Tax Tribunal
M/S Hindustan Petroleum Corporation ... vs Commissioner Of Central Excise, ... on 4 September, 2013
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. I Appeal No. E/2060/04 (Arising out of Order-in-Original No. 05/2004 dated 29.3.2003 passed by the Commissioner of Central Excise, Mumbai-II). For approval and signature: Honble Shri P.R. Chandrasekharan, Member (Technical) Honble Shri Anil Choudhary, Member (Judicial) ======================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it should be released under Rule 27 of the : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair copy : Seen of the order? 4. Whether order is to be circulated to the Departmental : Yes authorities? ====================================================== M/s Hindustan Petroleum Corporation Ltd. Appellant Vs. Commissioner of Central Excise, Mumbai-II Respondent Appearance: Ms. Padmavati Patil, Advocate with Ms. Mansi Patil, Advocate for Appellant Shri Ahibaran, Addl. Commissioner (AR) for Respondent CORAM: SHRI P.R. CHANDRASEKHARAN, MEMBER (TECHNICAL) SHRI ANIL CHOUDHARY, MEMBER (JUDICIAL) Date of Hearing: 04.09.2013 Date of Decision: 04.09.2013 ORDER NO. Per: P.R. Chandrasekharan
The appeal is directed against Order-in-Original No. 05/2004 dated 29.3.2003 passed by the Commissioner of Central Excise, Mumbai-II.
2. The issue for consideration pertains to dutiability of Naphtha during the period July, 2002 to January, 2003, which was used in the Captive Power Plant for generation of electricity, which in turn has been used:- (a) in manufacture of exempted final products which in turn has been cleared to fertilizer plant and LSHS cleared to M/s Tata; (b) in refinery, road lighting, canteen and administrative building etc. The adjudicating authority held that raw naphtha used in generation of electricity would be liable to excise duty and accordingly, confirmed a duty demand of Rs.1,92,75,054/- along with interest thereon and also imposing penalty of Rs.10,000/- under the Central Excise Rules, 2002.
3. The learned Counsel for the appellant submits that in appellants own case for the earlier period, an identical issue came up for consideration before this Tribunal and this Tribunal vide order dated 15.11.2011 [2013 (287) ELT 102 (Tri-Mum)] held that the benefit of exemption Notification No. 67/95-CE dated 16.3.1995 would be available on naphtha cleared availing exemption under Notification No. 4/2006-CE dated 1.3.2006 for manufacture of fertilizers under International Competitive Bidding (ICB) and on that much quantity of naphtha, attributable to electricity generated in captive power plant/co-generation plant, used for manufacture of exempted goods, namely, LPG (Domestic) and Superior Kerosene Oil (PDS). The Tribunal further held that the benefit of the said notification would not be available on that part of naphtha attributable to electricity generated in captive power plant/co-generation plant and used for allied activities like lighting in the artillery roads/yard, administrative building, canteen/ cafeteria. Thus, the learned Counsel submits that in the present case also, the ratio of the said decision be followed.
3.1 As regards the decision to deny the benefit of Notification No. 67/95 with respect to that quantity of naphtha used in generation of electricity, which in turn has been used for lighting purposes, it is stated that the matter is under challenge before the Hon'ble High Court of Bombay and the appeal in this regard is pending.
4. The learned Addl. Commissioner (AR) appearing for the Revenue reiterates the findings of the adjudicating authority.
5. We have carefully considered the submissions made by both the sides.
5.1 Inasmuch as in appellants own case decided on 15.11.2011, this Tribunal has held that the appellant would be eligible for benefit of Notification No. 67/95-CE in respect of naphtha supplied for manufacture of fertilizers and also naphtha consumed in the generation of electricity, which in turn, has been used in the manufacture of LPG (Domestic) and Superior Kerosene Oil (PDS), in the present case also, the appellant would be eligible for the benefit of the said notification in respect of naphtha supplied for manufacture of fertilizers and LSHS supplied to Tata. However, if electricity generated has been used for the purposes of lighting in the artillery roads/yard, administrative building, canteen/cafeteria, the benefit of the said notification would not be available. In the impugned order, the duty demand in respect of naphtha used in the manufacture of electricity, which in turn has been used for lighting purposes has been worked out at Rs.10,36,355/- and, therefore, the demand of duty to this extent would be sustainable in law as per the provisions of Section 11A of the Central Excise Act, 1944. Consequently, the demand of interest thereon also would be sustainable as per the provisions of Section 11AB.
5.2 As regards the penalty of Rs.10,000/- imposed, since the matter pertains to interpretation of exemption notification, imposition of penalty is not warranted and accordingly, the same is set aside.
6. The appeal is disposed of in the above terms.
(Dictated and pronounced in Court)
(Anil Choudhary) (P.R. Chandrasekharan)
Member (Judicial) Member (Technical)
Sinha