Nirma Limited Vs. C.C.E.

Nirma Limited vs C.C.E.

Type Court Judgment Court Customs Excise and Service Tax Appellate Tribunal CESTAT Ahmedabad Decided Feb 01, 2008

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Citation: sooperkanoon.com/46946
Court: Customs Excise and Service Tax Appellate Tribunal CESTAT Ahmedabad
Judge: A Wadhwa, V T M.
Decided On: Feb 01, 2008
Subject: Land Acquisition

Case Summary

AI-generated summary - not the official court judgment text.

Land Acquisition

Key legal issue: Land Acquisition

Parties & Advocates

Appellant / Petitioner

Nirma Limited

Respondent

C.C.E.

Legal References

Reported In: (2008)(128)ECC38

Excerpt

.....(appeals) no. 63/2007 (ahd-ii)ce/raju/comr.(a) dated 28.5.07.1.3 all these appeals involve a common issue concerning the same assessee m/s nirma limited and accordingly being dealt with by a common order. a) the assessees are engaged in the manufacture of single super phosphate in powder and granules form and for said the period they were procuring furnace oil, spent acid etc. under chapter x procedure. b) they applied to the jurisdictional central excise authorities seeking permission to procure furnace oil claiming that the same is intended for use as feedstock; the jurisdictional authorities issued ct-2 certificate authorizing such procurement. the department subsequently held that furnace oil cannot be treated as feedstock and accordingly ordered demand of duty from the assessee relating to the period march, 1999 to june, 2002. the appeals by the assessee have been filed challenging the demand of duty. the department's appeal is on the ground that during the certain period from 1.3.00 to 25.6.2002, the commissioner (appeals) wrongly applied the lower rate of 8% instead of 16%.3. the learned advocate appearing for the assessee concedes that the furnace oil procured by them under ct-2 certificate cannot be treated as feedstock as held by the hon'ble supreme court in the case of m/s gujarat narmada valley fertilizer company . however, in terms of the above decision, the assessee has applied by furnishing the relevant details and sought ct-2 certificate to enable procurement of furnace oil to be used as feedstock. the department without raising objection issued the certificate. on the basis of the said certificate, the manufacturer of the furnace oil cleared without payment of duty availing exemption. the appellant company have used the furnace oil only for the purpose for which it was declared. therefore, the question of any demand of duty from them does not arise. he also submitted that in terms of the decision of the hon'ble high court of allahabad in the.....

Full Judgment

1.1 Appeal No. E/163 5/05 is by M/s Nirma Limited against the order of Commissioner (Appeals) No. 20 to 21/2005 (20 to 21-A-II)CE/HB/Comr.(A) dated 23.2.05. Appeal No. E/1912/05 is by the Department against the very same order of the Commissioner (Appeals) in so far as the same related to reduction in the quantum of duty demanded by extending the benefit of Notification No. 5/99-CE which stood rescinded on 1.3.2000.

1.2 Appeal No. E/813/07 is against the order of the Commissioner (Appeals) No. 63/2007 (Ahd-II)CE/Raju/Comr.(A) dated 28.5.07.

1.3 All these appeals involve a common issue concerning the same assessee M/s Nirma Limited and accordingly being dealt with by a common order.

a) The assessees are engaged in the manufacture of single super phosphate in powder and granules form and for said the period they were procuring Furnace Oil, Spent Acid etc. under Chapter X procedure.

b) They applied to the jurisdictional Central Excise authorities seeking permission to procure furnace oil claiming that the same is intended for use as feedstock; the jurisdictional authorities issued CT-2 certificate authorizing such procurement. The department subsequently held that furnace oil cannot be treated as feedstock and accordingly ordered demand of duty from the assessee relating to the period March, 1999 to June, 2002. The appeals by the assessee have been filed challenging the demand of duty. The department's appeal is on the ground that during the certain period from 1.3.00 to 25.6.2002, the Commissioner (Appeals) wrongly applied the lower rate of 8% instead of 16%.

3. The learned Advocate appearing for the assessee concedes that the furnace oil procured by them under CT-2 certificate cannot be treated as feedstock as held by the Hon'ble Supreme Court in the case of M/s Gujarat Narmada Valley Fertilizer Company . However, in terms of the above decision, the assessee has applied by furnishing the relevant details and sought CT-2 certificate to enable procurement of furnace oil to be used as feedstock. The department without raising objection issued the certificate. On the basis of the said certificate, the manufacturer of the furnace oil cleared without payment of duty availing exemption. The appellant company have used the furnace oil only for the purpose for which it was declared. Therefore, the question of any demand of duty from them does not arise. He also submitted that in terms of the decision of the Hon'ble High Court of Allahabad in the case of U.P. State Cement Corporation Ltd. v. UOI , the limitation for demand of duty under Rule 196 of the Central Excise Rules 1944 is as provided under Section 11A of the Central Excise Act, 1944.

4. The learned SDR submits that duty is demandable from the appellant company as they have procured the goods under CT-2 certificate after executing a bond. He also submits that the rate of duty adopted for the period from 1-3-00 is wrong.

5. We have carefully considered the submissions from both the sides. It is a case where the appellant company has received the material without payment of duty under CT-2 certificate following Chapter X procedure.

If the CT-2 certificate was not produced, the supplying unit should have paid duty and could not have availed the exemption. If the exemption Notification has been wrongly availed, it would be proper to demand from the assessee who has availed the exemption. The execution of the bond for the recipient unit is only to ensure that the material received by them is not diverted or utilized for the purpose other than the intended purpose. If the goods are received under CT-2 certificate the certificate was diverted to the market or diverted for the purpose other than the intended purpose, then the recipient unit could be proceeded against for recovery of duty involved on the goods in terms of the bond. In this case, we find that there is no mis-declaration of any nature by the appellant company in seeking to procure the furnace oil as feedstock. The subsequent development in the form of judgment holding that furnace oil cannot be considered as feedstock cannot lead to any conclusion that appellant company was involved in any mis-declaration. The appellant company, having utilized the material received for the intended purpose, have discharged their obligation as per bond executed by them. In such a situation, the demand of duty from the recipient unit does not arise. If the duty is to be demanded from the supplying unit then action should have been taken to cancel the CT-2 certificate issued and proceed to recover the duty as per law, which is not the case here.

6. In the light of the above, appeals Nos. E/1635/05 and E/813/07 by M/s Nirma Limited are allowed. Appeal No. E/1912/05 by the Department is rejected.

Same Court & Year Customs Excise and Service Tax Appellate Tribunal CESTAT Ahme... Same Parties Nirma Limited vs C.C.E. Same Subject Land Acquisition Same Judge A Wadhwa, V T M.