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1. This is an appeal against Order-in-Appeal No. 297/ASM/83, dated 31-12-1983 passed by the Collector of Central Excise (Appeals), Calcutta, by which the Collector confirmed the Order-in-Original No. I D-IV/DB/5/Demand/RPC/83, dated 19-5-1983 passed by the Assistant Collector of Central Excise, Dhubri, Assam. The Assistant Collector, by his Order, demanded a sum of Rs. 25,49,477.70 as duty from M/s Bongaigaon Refinery & Petrochemicals Ltd. (hereinafter referred to as "the appellants") on 4500 metric tonnes of Raw Petroleum Coke (RPC) produced and removed by the appellants without payment of duty within the factory premises as feed stock for the production of Calcined Petroleum Coke (CPC).,

2. The facts of the case, briefly stated, are that the appellants are engaged in the refining of crude petroleum resulting in the manufacture of petroleum products. They also manufacture petrochemicals. It appears that they were engaged in the production, inter alia, of RPC in their delayed Coker unit with effect from 21-9-1981. The allegation levelled against the appellants is that they had not obtained any Central Excise licence for the manufacture of RPC, that they had not filed classification and price lists, that they had not submitted monthly assessment returns and had not observed other prescribed Central Excise procedures and requirements and removed the RPC so produced (4500 metric tonnes) without payment of the duty leviable thereon from the place of its storage as feed stock for the production of CPC within the factory premises. By a notice dated 9-7-1982, the appellants were called upon to show cause why duty amounting to Rs. 25,49,477.70 should not be demanded from them under Central Excise Rule 9(2) and Rule 49 (as amended by Notification No. 20/82-CE, dated 20-2-1982) and Section 11 of the Central Excises & Salt Act, 1944 and why penalty should not be imposed upon them under Rule 9(2) read with Rule 226 for contravention of the provisions of Rules 174, 43, 48, 226, 173-B, 173-C, 173-G(2), 173-G(3), 173-G(4) and 9(1) read with 49(1) and 173-F. The appellants, in their reply to the show cause notice, contended that RPC was classifiable under item No. 1 l-A of the Central Excise Tariff Schedule (CET) for which item they were holding a Central Excise licence. They further contended that, since RPC was an intermediate product, they were not required to observe other Central Excise formalities. After hearing the appellants, the Assistant Collector, in his adjudication order, held that RPC was not an intermediate product in the manufacture of CPC in the sense that RPC was derived from refining of crude petroleum in an integrated and uniterrupted process as an end-product. He further held that the process of manufacture as contemplated in Section 2(f) of the Central Excises & Salt Act, 1944 (hereinafter referred to as the Act) was complete. CPC was prepared in a distinctly separate process of calcination. The RPC was a clearly identifiable and distinct excisable commodity which was capable of being physically removed and was being marketed by all other refineries. The appellants were, therefore, required to pay duty on the aforesaid quantity of RPC even if it was considered as an intermediate product, in accordance with Rules 9 and 49, as amended. The Assistant Collector confirmed the demand for duty as set out in the show cause notice, but did not impose any penalty on the appellants considering that there was no mala fide intention.

Aggrieved with this order, the appellants preferred an appeal before the Collector (Appeals), Calcutta. The Collector, after hearing the appellants, confirmed the Assistant Collector's Order. With reference to the claim for exemption under Central Excise Notification No. 95/79, dated 1-3-1979, the Collector observed that the exemption was applicable only in cases where the procedure set out in Central Excise Rule 56-A was followed and where duty payable on the RPC had already been paid prior to the manufacture of CPC. Since the appellants had not followed the provisions of the Notification during the material period, the Collector rejected the claim.

9. Notification 95/79-CE., dated 1-3-1979, referred to by Shri Kumtakar, exempts calcined petroleum coke (item No. 11C) from so much of the excise duty leviable thereon as is equivalent to the amount of the excise duty already paid on petroleum coke (Item No. 11 A) used in its manufacture. The exemption is, however, subject to the procedure set out in Central Excise Rule 56A being followed. In other words, to avail of the exemption on CPC, the "input" RPC must have suffered duty and the Rule 56A procedure is followed. In the present case, the RPC had admittedly not suffered the duty payable thereon. The notification, therefore, is of no avail to the appellants.