Custom, Excise & Service Tax Tribunal
Chennai Petroleum Corporation Ltd vs Cce, Chennai on 12 March, 2008
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal Nos. E/93 and 601/2003
(Arising out of Order-in-Appeal No.94/2002 (M-I) dated 29.11.2002 and No. 73/2003 (MI) dated 23.7.2003 passed by the Commissioner of Central Excise (Appeals), Chennai)
For approval and signature:
Honble Mr. P. G. Chacko, Member (Judicial)
Honble Mr. P. Karthikeyan, Member (Technical)
1. Whether Press Reporters may be allowed to see 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 CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether the Members wish to see the fair copy of the Order?
4. Whether Order is to be circulated to the Departmental authorities?
Chennai Petroleum Corporation Ltd. Appellants
Vs.
CCE, Chennai Respondent
Appearance Shri R. Raghavan, Advocate for the Appellants Shri J.P. Gregory, Jt. CDR, for the Respondent CORAM Honble Mr. P. G. Chacko, Member (J) Honble Mr. P. Karthikeyan, Member (T) Date of Hearing: 12.03.2008 Date of Decision: 12.03.2008 Final Order No. ____________ Per P. G. CHACKO These appeals of the assessee are against demands of duty on what is called demineralized water [DM water for short], for the periods August 2000 to March 2001 and April 2001 to September 2001. During the periods of dispute, DM water was prepared by a process of purification in the assessees factory, used in boilers in the generation of steam, this steam was used to run a turbine for generation of electricity, a major part of this electricity was captively consumed in the manufacture of final products in the factory and the remaining portion of the electricity was supplied to the TNEB (Tamilnadu Electricity Board) grid. On these facts, the lower authorities classified DM water under SH 2851.19 of the First Schedule to the Central Excise Tariff Act after rejecting the assessees claim for classification of the item under SH 2851.11. The impugned demand of duty is consequential to this classification. The relevant part of the text of the Tariff entry is extracted hereunder:-
Heading Sub-Heading Description of goods (1) (2) (3) 28.51 Other inorganic compounds (including distilled or conductivity water and water of similar purity); liquid air (whether or not rare gases have been removed); compressed air; amalgams, other than amalgams of precious metals
- Distilled or conductivity water and water of similar purity:
2851.11
-- Used within the factory of production 2851.19
-- Others
2. Learned counsel for the appellants has submitted that it is not in dispute that DM water was used within the factory of production. Learned Jt. CDR has not contested this submission of the counsel. He, however, submits that a part of the electricity generated by the process involving DM water was used outside the factory of production. In other words, learned Jt. CDR reiterates the logic adopted by the lower authorities. We find that it is not in dispute that DM water is classifiable under single entry Distilled or Conductivity Water and Water of Similar Purity. The question now is whether it should be classified under SH 2851.11 [-- Used within the factory of production] or under SH 2851.19 [-- Other]. If DM water was used within the factory of its production, it should be classified only under SH 2851.11. Admittedly, it was used within the factory of its production and accordingly it has to be classified appropriately under SH 2851.11 attracting nil rate of duty.
In the result, the demand of duty is set aside and these appeals are allowed.
(Dictated and pronounced in open court)
(P. KARTHIKEYAN) (P.G. CHACKO)
Member (T) Member (J)
Rex
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