Customs, Excise and Gold Tribunal - Mumbai
Demosha Chemicals Limited vs Cce on 8 July, 2003
ORDER V.K. Agrawal, Member (T)
1. The issue involved in this appeal filed by M/s. Demosha Chemicals Limited is whether the excise duty is leviable on Spent Sulphuric Acid.
2. Shri J.C. Patel, learned Advocate, submitted that the Appellants manufacture Sodium Hydrosulphite Acid and other chemicals and avail of Modvat Credit of the duty paid on the inputs; that Oleum, which is a concentrated sulphuric acid, is one of the inputs used in the manufacture of final products; that Oleum, a concentrated sulphuric acid dehydrates sulphur by removing moisture and sulphur trioxide in it reacts with sulphur and spent sulphuric acid, a by product, is obtained; that they were clearing the said spent sulphuric acid without payment of Central Excise duty under valid approved classification list; that it has been clarified in Vadodara commissionerate's Trade Notice No. 171/88 dated 12.9.88 that spent sulphuric acid is not a manufactured product; that the Commissioner (Appeals) has confirmed the demand of duty. The learned Advocate, further, submitted that the Trade Notice No. 171/88 dated 12.9.88 was issued by the Vadodara Commissionerate to clarify that the spent sulphuric acid is not a manufactured product and, therefore, would not be charged to duty again; that as per the decision of the Supreme Court in the case of CCE, Vadodara v. Dhiren Chemical Industries, 2002 (143) ELT 19 (SC), CBEC's circulars are binding on Revenue even if placing different interpretation than given by the Supreme Court.
3. I also heard Shri H. Kothikar, learned SDR for Revenue, who reiterated the findings as contained in the two Orders passed by the lower authorities.
4. I have considered the submissions of both sides. It is not in dispute that the Vadodara Commissionerate has clarified that spent sulphuric acid is not a manufactured product and therefore would not be charged to duty again and that the Modvat Credit of the duty paid on concentrated sulphuric acid should be restricted to the duty element on the concentrated sulphuric acid actually consumed in sulphonation reaction. The period involved in the present appeal is June, 1991 to December, 1991. Nothing has been brought on record by the Revenue to show that the said Trade Notice was not in operation during the relevant period. It is settled law that the Circulars issued by the Department are binding on the Officers of Central Excise. It has been held by the Supreme Court in the case of CCE, Vadodara v. Dhiren Chemical Industries, 2002 (139) ELT 3 (SC) that "regardless of the interpretation that we have placed on then said phrase, if there are Circulars which have been issued by the Central Board of Excise & Customs which place a different interpretation upon the said phrase, that interpretation will be binding upon the Revenue." The Supreme Court again in the case of CCE v. Vadodara v. Dhiren Chemical Industries, 2002 (143) ELT 19 (SC) dismissed the appeal filed by the Revenue observing that there are circulars issued by the Board placing a different interpretation upon that phrase "on which the appropriate amount of duty of excise has already been paid" and which apply to the facts of the appeals before the Supreme Court. Thus, following the ratio of the Supreme Court's decision, the appeal filed by the Appellants is allowed.
(pronounced in court)