Customs, Excise and Gold Tribunal - Delhi
Collector Of C. Ex. vs Hindustan Fertiliser Corporation Ltd. on 30 November, 1989
Equivalent citations: 1996(85)ELT187(TRI-DEL)
ORDER D.C. Mandal, Member (T)
1. In this case the respondents received sulphuric acid and availed of the benefit of exemption under Notification No. 81/75C.E., dated 22-3-1975 claiming that the sulphuric acid would be used in the manufacture of fertiliser. Under this notification, sulphuric acid vised in the manufacture of fertiliser was exempted from the central excise duty. The sulphuric acid received by the respondents was used by them for demineralisation of water and the said demineralised water was used for production of steam required for the manufacture of urea fertiliser. The Assistant Collector of Central Excise disallowed the benefit of aforesaid notification on the ground that the sulphuric acid was not directly used in the manufacture of fertiliser. On appeal filed before the Collector of Central Excise (Appeals), who, following the Order-in-Appeal No. 297 of 1982, dated 20-9-1982 passed by the Central Board of Excise & Customs, set aside the order of the Assistant Collector and allowed the appeal. Hence, the Revenue has filed the present appeal before us.
2. We have heard Shri Sunder Rajan for the appellant Collector and Shri Banerjee for the respondents. At the beginning of the hearing, Shri Sunder Rajan has argued that Cross objections filed by the respondents are not maintainable as no portion of the impugned order is against them. Further, he has argued that Cross-objection No. E/Cross/176/86-C is time-barred. The learned advocate for the respondents have not rebutted the objection raised by Shri Sunder Rajan and he has stated that he has no objection if the cross-objections are rejected. We have gone through the cross objections and have also considered the arguments advanced on them. The impugned order of the Collector (Appeals) was in favour of the respondents. There was, therefore, no case for them to file any cross objection. Further, as argued by Shri Sunder Rajan cross-objection No. 176/86-C was time-barred. Moreover, the cross objections are in the nature of comments on the appeal filed by the Revenue. In the circumstances, we dismiss the cross-objections.
3. Shri Sunder Rajan has argued that the raw material for the manufacture of urea fertiliser is Naptha and steam. The exemption under Notification No. 81/75-C.E. is subject to the satisfaction of the Assistant Collector of Central Excise that the sulphuric acid has been used in the manufacture of fertilisers. In this case, the Assistant Collector of Central Excise was not satisfied and hence, he disallowed the exemption. The learned advocate for the respondents have argued that without sulphuric acid urea cannot be manufactured. Indirect use of sulphuric acid in the manufacture of fertiliser is covered by the notification. In this connection, he has relied on this Tribunal's Order No. 338-339/87-C, dated 7-5-1987 [reported in 1987 (30) E.L.T. 507 (Tribunal)]. He has argued that the present case is fully covered in favour of the respondents.
4. In the case of M/s. Fertiliser Corporation of India Ltd. v. Collector of Central Excise, Patna, this Tribunal in Order No. 338-339/87-C, dated 7-5-1987 [reported in 1987 (30) E.L.T. 507 (Tribunal)] has held that if sulphuric acid was used in one of the essential processes of manufacture of phosphoric acid, which included the production of SHMP and the use thereof in the treatment of water, which was then used in the manufacture of fertilisers, it could hardly be argued that such sulphuric acid was not used in the manufacture of fertiliser. In the said case, M/s. Fertiliser Corporation of India Ltd. (supra) used sulphuric acid in the manufacture of phosphoric acid which was then used in the manufacture of Sodium Hexa-Meta Phosphate (SHMP for short). The Tribunal allowed the benefit of exemption notification in respect of the sulphuric acid used in the said case. The facts are similar in the present case. The Assistant Collector has not allowed the benefit of exemption on the ground that the sulphuric acid was not used directly in the manufacture of urea. The argument before the Collector (Appeals) advanced on behalf of the respondents herein was that the sulphuric acid was used in the process of treatment of water which generated steam and the said steam was essential for the manufacture of fertiliser. The learned advocate for the respondents has also argued before us that without sulphuric acid urea could not be manufactured. The sulphuric acid was used for demineralisation of water and this is an essential part in the process of manufacture of urea fertiliser. This case is, therefore, clearly covered in favour of the respondents vide this Tribunal's Order No. 338-339/87C, dated 7-5-1987 [reported in 1987 (30) E.L.T. 507 (Tribunal)] on which reliance has been placed by the learned advocate. We do not find any justification to take a different view in the present case and we do not find it necessary to refer this to a Larger Bench as prayed by the learned DR.
5. In the light of the above discussions, we uphold the decision of the Collector (Appeals) that the benefit of the notification was available in respect of the sulphuric acid used by the respondents in the manner stated above in the orders of the lower authorities. Hence, the appeal of the Revenue is dismissed.