Customs, Excise and Gold Tribunal - Delhi
Gujarat Narmada Valley Fertilizer Co. ... vs Collector Of C. Ex. on 20 September, 1989
Equivalent citations: 1989(25)ECR344(TRI.-DELHI), 1990(45)ELT569(TRI-DEL)
ORDER
G. Sankaran, Senior Vice-President
1. The West Regional Bench, of this Tribunal sitting as a Special Bench, had already disposed of the stay application filed by the appellants by Order No. 176/89-WRB dated the 5th July, 1989. The present application is for staying the operation of the impugned order in so far as it directs withdrawal of the concession granted to the appellants under Central Excise Rule 192 in respect of Raw Naphtha used in extraction of unconverted carbon from soot-water and forfeiture of security deposit by them with B. 8 Bond under Rule 196. There is also a prayer that the appeal be heard at an early date.
2. We have heard Shri Willingdon Christian, Advocate, for the appellants and Shri V. Chandrasekharan, DR, for the respondent-Collector.
3. The Counsel for the appellants has drawn our attention to the affidavit filed by Shri Amarnath Agarwal, Executive Director (Operations) of the appellant-company, deposing that the soot carbon extraction section is an indispensable, intertwined and integral part of the whole manufacturing system of Ammonia at GNFC, so much so that without use of raw naphtha, the manufacturing cycle for production of ammonia cannot be completed. If, raw naphtha is not permitted to be received from the oil refineries, the production of ammonia would come to a standstill. The DR drew our attention to the Tribunal's decision in Steel Authority of India Ltd. v. Collector of Central Excise 1989 (42) E.L.T. 686 in which it was held that raw naphtha which was burnt in the Naphtha Reforming Plant for keeping the plant in a continuous run so that the ammonia plant could be switched on to action immediately after revival of the supply of power (which had broken down) and which, therefore, did not even reach the ammonia plant, could not be said to have been used for the manufacture of fertilizer. As against this, the Counsel for the appellants, drew our attention to the Tribunal's decision in Collector of Central Excise, Bhubaneshwar v. Titagur Paper Mills 1985 (6) ETR 38 in which it was held that there was no authority to say that an input or raw material must go directly into the finished product. As long as it is consumed and utilised in a way that results and helps in the production or manufacture of the article in which the system is engaged, it is a raw material and is an input for that finished product. Though both these decisions do not prima facie appear to be relevant to the present case. Having regard to all the facts and circumstances urged before us, we are of the opinion that pending hearing of the appeal, and disposal of the appeal, it would be just and proper to allow the appellants to receive raw naphtha from the concerned oil refineries in terms of their L.6 Licence so that the production of ammonia may not come to a standstill. Accordingly, we stay the operation of the impugned order to the extent it withdraws the concession, during the pendency of this appeal. Having regard to the large revenue involved as well as the need even otherwise for early decision in the matter, the hearing of the appeal is fixed peremptorily for 19th October, 1989. It has been made clear to the Counsel for the appellants that they should ensure representation before the Tribunal on that date and hearing would not be adjourned on any count.
4. The Registry will place this appeal on the top of the list of regular matters for 19-10-1989.
5. The Department will be at liberty to issue show cause notices for the amount of duty involved on the raw naphtha received by the appellants in terms of this order in order to safeguard revenue. However, the notices will not be adjudicated pending disposal of this appeal.
6. A copy of this order shall be furnished to both sides.