Customs, Excise and Gold Tribunal - Delhi
Cce vs Ballarpur Industries Ltd. on 3 April, 2000
Equivalent citations: 2001(94)ECR77(TRI.-DELHI)
ORDER G.R. Sharma, Member (T)
1. Revenue has filed the captioned appeals. Being aggrieved by the impugned order passed by the Ld. Commissioner of Central Excise, New Delhi, Ld. Commissioner in his order had held that sodium sulphate is a necessary input for the manufacture of paper and paper board. To support this view, he cited and relied upon the decision of the Hon'ble Supreme Court in the case of appellant himself reported in 1989 (43) ELT 805 : 1990 (27) ECR 279 (SC). Ld. Commissioner held that Sulphuric Acid is used in the manufacture of paper and paper board and thus, it was an input in the manufacture of paper and paper board. Regarding Hydrazine Hydrate Acid Ld. Commissioner held that it is used partly for manufacture of paper and partly for purifying water by removing chlorine and oxygen in the water; that purified water is used partly for manufacture of paper and partly for producing steam for generation of electricity. He, therefore, discharged the SCN issued to the appellants.
2. Arguing the case for Revenue Shri M.M. Dubey, Ld. DR submits that the Ld. Commissioner has erred in holding that entire treated water (treated by inputs viz. hydrazine Hydrate, Sulphuric Acid and Sodium Sulphate) was used in the manufacture of paper manufacturing process and thus, the entire Modvat credit on these inputs used in treated water was available to the assessee; that as for the facts on record the treated water apart from being used in the manufacture of paper and paper board is also used by the party in the generation of steam fed into turbine to generate electricity; that the West Regional Bench of CEGAT in the case of Saurashtra Chemicals v. CCE held that the credit would not be admissible pro-rata for portion of the steam fed into turbine and used as motive power but would be admissible for the portion fed directly into the manufacturing process. Therefore, the reliance by Commissioner on the reported decision in 1989 (43) ELT 801 and has misplaced. Ld. DR submitted that the findings of the Ld. Commissioner on limitation are also not available. He, therefore, prayed that the appeal may be allowed.
3. Shri Madhav Rao, Ld. Counsel appearing for the respondent submits that in so far as use of Sodium Sulphate is concerned, he submits that Sodium Sulphate was not in dispute. He submitted that no Modvat credit was taken on Sodium Sulphate.
4. Ld. Counsel submitted that in so far as Sulphuric Acid is concerned it was used for manufacture of paper and paper board. He submitted that it was directly used as an input. He submitted that the decision of the Apex Court in their own case cited above holds that sulphuric acid is an input.
4.1. Ld. Counsel submits that in so far as hydrazine hydrate used in purifying water is concerned he submits that only this chemical was used for purifying water and sodium sulphate and sulphuric acid was not used. He submits that the water so purified is partly used in the process of manufacturing paper and partly for converting it into steam for moving the turbine for generation of electricity. He submits that steam used for moving the turbine is held to be as an input. He, therefore, submits that the Ld. Commissioner has correctly held that Modvat credit would be admissible on hydrazine hydrate.
5. On careful consideration of the submissions made by both the sides and on perusal of the case law cited and relied upon by both the sides, we find that there is no infirmity in the impugned order in-as-much sodium sulphate was not the subject matter of dispute. It was only sodium sulphite and no Modvat credit on sodium sulphite was taken. We also note that sulphuric acid is a raw material for the manufacture of paper as was held by the Apex Court in the appellant's own case 1990 (27) ECR 279 (SC). In so far as hydrazine hydrate is concerned, we find that it was used for purifying water which was partly used in the process of manufacture of paper and partly used in generation of steam for running the turbines for generating electricity. We, therefore, do not find any legal infirmity in the impugned order. The impugned order is, therefore, upheld and the appeals are rejected.