1. Pursuant to Misc. Order No. 213/2008 dated 13.5.2008 passed by the South Zonal Bench [Chennai], we have to decide on the following issues referred to us: (a) Whether the special provisions for refineries laid down in Chapter VII of the erstwhile Central Excise Rules, 1944 can be considered to have continued to be in force under the Central Excise (No. 2) Rules, 2001 and the Central Excise Rules, 2002; (b) Whether, after 30.06.2001, the respondents are entitled to the benefit of the special scheme for refineries provided under Rule 143A of the erstwhile Central Excise Rules, 1944.
2. The facts of the case as stated in the referral order are as follows: M/s. Chennai Petroleum Corporation Ltd. [(M/s. CPCL, for short) -- erstwhile 'Madras Refineries Ltd.'], the respondents herein, are engaged in the manufacture of petroleum products falling under Chapter 27 of the First Schedule to the Central Excise Tariff Act, 1985. One of these products is Fuel Oil (SH 2713.30 of the said Schedule) which is captively used for generating steam which, in turn, is captively used in certain stage of fractional distillation of crude petroleum. Thus Fuel Oil is captively consumed in the manufacture of other petroleum products. One of such other petroleum products is Raw Naphtha which, when supplied to fertilizer manufacturers, attracts NIL rate of duty. During the period April, 2000-March, 2002, a portion of the Raw Naphtha manufactured in the respondents' refinery was removed, without payment of duty, to fertilizer manufacturers. The department issued show-cause notices to M/s. CPCL for recovery of a total amount of duty of Rs. 2,93,13,416/- for the above period on a total quantity of 23,311.980 MTs of Fuel Oil manufactured and captively consumed in their refinery, alleging that the benefit of exemption under Notification No. 67/95-CE dated 16.05.1995 (as amended) was not admissible to the said quantity of Fuel Oil which was allegedly consumed in the manufacture of Raw Naphtha which was removed, at NIL rate of duty, to fertilizer manufacturers. These show-cause notices also proposed penalty under Rule 173Q of the Central Excise Rules, 1944/Rule 25 of the Central Excise (No. 2) Rules, 2001/Rule 25 of the Central Excise Rules, 2002 for the alleged violation of law by M/s. CPCL. The noticee contested the proposals on numerous grounds. In adjudication of the dispute, the Assistant Commissioner of Central Excise confirmed the demand of duty against M/s. CPCL after finding that (a) the Fuel Oil manufactured in their refinery was an excisable product classifiable under SH 2713.30 as Residual Fuel Oil (RFO, for short); (b) it was captively consumed in the manufacture of Raw Naphtha; (c) such consumption during the period of dispute was to the extent of 5.679% of the total quantity of Fuel Oil manufactured and captively consumed in the refinery and, on this basis, 23,311.980 MTs of Fuel Oil were captively consumed in the manufacture of exempted Raw Naphtha; and (d) the exemption under Notification No. 67/95-CE dated 16.03.1995 (as amended) was not admissible to such quantity of Fuel Oil. Aggrieved by this decision of the adjudicating authority, M/s. CPCL preferred an appeal to the Commissioner (Appeals) and the appellate authority, following the Tribunal's Final Order No. 63-67/2005 dated 07.01.2005 {reported as Madras Refineries Ltd. v. Commissioner of Central Excise, Chennai }, held that duty of excise was not leviable on the Fuel Oil used for generating steam required for the manufacture of Naphtha in CPCL's refinery. The captioned appeal was filed by the Revenue against the decision of the Commissioner (Appeals).
3. The referring Bench noted that, for the period from April 2000 to June 2001 [during which period Rule 143A of the Central Excise Rules, 1944 governed the manner in which petroleum products manufactured in a refinery (so declared under Sub-rule (2) of Rule 140 and deemed to be a registered warehouse for purposes of Chapter VII of the Central Excise Rules, 1944) could be captively used], the question whether duty of excise was leviable on any quantity of Fuel Oil used for generating steam required for the refining of crude petroleum (yielding petroleum products) in the respondents' refinery stood settled by the apex Court vide Commissioner of Central Excise, Chennai v. Chennai Petroleum Corporation Ltd. 2007 (211) ELT 193 (SC). The referring Bench also noted that the Commissioner (Appeals), in the impugned order, relied on Final Order Nos. 63 - 67/2005 dated 7.1.2005 passed by the Bench in the respondents' own case . The relevant portion of Final Order Nos. 63 - 67/2005 ibid relied on by the lower appellate authority and reproduced by the referring Bench reads as under: Following the decision in IOCL's case, we hold that no duty was leviable on any quantity of Fuel Oil/LSHS used for generating steam required for the refining of crude petroleum (yielding petroleum products) in the appellants' refinery during the period of dispute, as we have found that such use of Fuel Oil/LSHS was covered by the expression "conduct such further manufacturing processes" under Rule 143A. Naphtha is, admittedly, one of the petroleum products resulting from the refining of crude petroleum. No duty could be levied on the Fuel Oil used for generating steam required for the manufacture of this product.
The referring Bench further noted that the Department had filed Civil Appeals against Final Order Nos. 63 - 67/2005 ibid and that those appeals were disposed of by the apex Court by judgment dated 19.4.2007 reported as Commissioner v. Chennai Petroleum Corporation Ltd. 2007 (211) ELT 193 (SC), wherein the said Final Order of the Tribunal was upheld. In view of the apex Court's judgment, the referring Bench rejected Grounds 8 & 9 of the Revenue's appeal and held that the order of the lower appellate authority setting aside the demand of duty on the respondents for the period prior to 1.7.2001 was sustainable.
4. On the surviving issue viz. whether the respondents were entitled to the same benefit for the subsequent period [1.7.2001 to 31.3.2002], the referring Bench, after hearing both sides at length and considering their submissions, took the view that the statutory scheme specially made for refineries under Chapter VII of the old Central Excise Rules, 1944 came to an end with the supersession of those rules and, consequently, from 1.7.2001, petroleum products produced in a refinery and captively consumed in the manufacture of other petroleum products cleared for home consumption were on par with excisable goods produced and captively consumed in other factories, under the Central Excise (No. 2) Rules 2001 and the Central Excise Rules, 2002. But this view was found to be in conflict with the decision taken by a coordinate Bench in the respondents' own case vide CPCL v. Commissioner 2005 (192) ELT 973 (Tri.-Del.).
6.1. The special warehousing provisions for petroleum refineries were superseded on 1.7.2001 without providing similar provisions in the new Rules viz. the Central Excise (No. 2) Rules, 2001. Rule 32 (transitional provision) of the new Rules did not have the effect of protecting the 'deemed warehouse' status of refineries conferred under the old provisions. Prior to 1.7.2001, the provisions of Rule 140(2), Rule 143A and Rule 157 of the old Rules (CER, 1944) constituted a self-contained code for refineries with overriding effect on the general provisions relating to removal of goods for captive and home consumptions. On account of such overriding effect, the deeming provisions of Rule 9(1) of the old Rules being general provisions were not applicable to removal of intermediate products warehoused in a refinery (declared as 'refinery' by the Central Government under Rule 140(2) and deemed to be a 'warehouse' for purposes of Rules 143A and 157) and used in the manufacture of end-products as held by this Tribunal in the case of IOC Limited v. Commissioner . The ratio of the decision in IOCL's case was followed in Final Order Nos. 63 - 67/2005 ibid [Madras Refineries Limited v. Commissioner ] and the latter was affirmed by the Supreme court vide 2007 (211) ELT 193 (SC). It would follow that, with the self-contained code no longer in existence after 30.6.2001, refineries are not deemed warehouses and their operations must be governed by the general provisions of the new Rules. Hence the view taken by the Tribunal in the respondents' case reported in 2005 (192) ELT 973 (Tri. - Del.) for the period from 1.7.2001 is not legally correct. The only provision for warehousing of goods under the new Rules is Rule 20. Under this provision, excisable goods could be removed without payment of duty from the factory of production to a warehouse or from one warehouse to another warehouse, if permitted by the Central Govt. by Notification, and this facility would be available subject to such conditions, limitations, safeguards and procedure as may be specified by the Board. Notification 47/2001-CE (NT) dated 26.6.2001 was issued by the Central Govt. under Rule 20(1) extending the above facility to refineries also and accordingly a refinery was entitled to remove, without payment of duty, specified petroleum products including Fuel Oil falling under SH 2713.30 of the CETA Schedule to any warehouse outside it. It could also remove such products from one warehouse to another warehouse without payment of duty. The scope of operations permitted under Sub-rule (1) of Rule 20 can also be discerned from the Board's Circular No. 579/16/2001-CX dated 26.6.2001 which laid down the procedure, conditions etc. under Sub-rule (2). Neither the Rule nor the above Notification can be construed as having facilitated removal of any petroleum product without payment of duty for captive consumption within the refinery.
Even the above facility was withdrawn when the above Notification was superseded by Notification No. 17/04-CE (NT) dated 4.9.2004.
Under Sub-rule (1) of Rule 20 read with Notification 47/2001-CE(NT) dated 26.6.2001, a refinery as factory of production of petroleum products could remove such products without payment of duty to a warehouse outside it if it satisfied the conditions laid down under Sub-rule (2) and, that too, upto 4.9.2004 only. Thus Rule 20 did not authorize or facilitate removal of any petroleum product within the refinery, without payment of duty, for captive consumption.
Continuance of refinery activities as deemed warehouse in terms of the old Rule 143A is inconsistent with the new rules. The Central Government's order dated 3.6.1969 declaring respondents' manufacturing premises as "refinery" under Sub-rule (2) of Rule 140 of the Central Excise Rules, 1944 thereby deeming it to be a warehouse registered under Sub-rule (1) did not survive the parent rule and therefore the refinery lost its 'deemed warehouse' status on 1.7.2001.
6.2. In the context of submitting that nothing contained in the Central Excise Rules, 1944 could be invoked to maintain 'deemed warehouse' status for a refinery beyond the date on which those rules were superseded by the Central Excise (No. 2) Rules, 2001, the learned SDR has relied on the judgment of the Bombay High Court in Commissioner v. Indorama Textiles Ltd. , wherein it was observed that the Central Excise Rules, 1944 and the Central Excise (No. 2) Rules, 2001 lost their legal force on 1.3.2002 when the Central Excise Rules, 2002 came into force. In the context of submitting that the Tribunal's decision in CPCL's case 2005 (192) ELT 973 to the effect that their refinery is entitled to continue its activities in terms of Rule 143A of the old Central Excise Rules after 30.6.2001 by virtue of the transitional provisions of Rule 32 of the Central Excise (No. 2) Rules, 2001 is not good law, the learned SDR has referred to the Supreme Court's observations on interpretation of judgments of courts in Collector v. Alnoori Tobacco Products (SC).
6.3. The SDR has also relied on the minutes of the meeting of the 'Committee on Disputes', dated 4.12.2007, wherein the contention of CBEC's representative that, as any provision analogous to the old Rule 143A did not exist from 1.7.2001, CPCL's challenge against demand of duty on RFO manufactured and captively consumed in the manufacture of other petroleum products within their refinery from 1.7.2001 was not sustainable in law was accepted by the Committee and, accordingly, permission was declined to the company to pursue the matter before this Tribunal. She has also pointed out that the Civil Appeal filed by the Department against the Tribunal's decision in CPCL's case 2005 (192) ELT 973, relied on by the respondents in the present case, is pending before the apex Court. Finally, the SDR has prayed for answering the referred issues in the negative.
7.1. On the other hand, the learned Counsel for the respondents has made an endeavour to show that it has never been the intention of the Central Govt. to discontinue the scheme for petroleum refineries laid down in Chapter VII of the Central Excise Rules, 1944. In this connection, he has driven our attention through the Government's Budget proposals/Circulars/Orders of the 1960s and has also referred to ' OF DEPARTMENTAL INSTRUCTIONS ON EXCISABLE PRODUCTS'. Excerpts from the old Budget proposals, circulars, instructions etc. have also been placed on record by the counsel to show that it has never been the intention of the Central Govt. to levy duty of excise on mineral oil products coming into existence at intermediary stages of manufacture of finished petroleum products.
The Government's order dated 3.6.1969 issued under Sub-rule (2) of Rule 140 of the Central Excise Rules, 1944 declaring the respondents' manufacturing premises as "refinery" in relation to petroleum products including RFO for the purpose of the said rule had the effect of conferring 'deemed warehouse' status permanently on the refinery inasmuch as the said order did not specify any period of validity. The order has not been revoked or rescinded and has continued to be in force beyond 30.6.2001 by virtue of Section 6 of the General Clauses Act, 1896, if not by virtue of the transitional provisions of Rule 32 of the Central Excise (No. 2) Rules, 2001 and Rule 33 of the Central Excise Rules, 2002. The refinery is still holding the licence granted to it by the Department under Rule 174 of the old Central Excise Rules, which licence was also referred to in the Government's order dated 3.6.1969. By virtue of the proviso to Sub-rule (1) of Rule 9 of the Central Excise (No. 2) Rules, 2001, the registration already obtained under Rule 174 of the old rules shall be deemed to be registration for the purposes of the new rules. Therefore, the respondents' refinery shall be deemed to be a warehouse registered under the new Rule 9(1) and, by virtue of this legal position, the refinery could continue beyond 30.6.2001 to undertake its activities which were being undertaken by it under the old Rule 143A. Rule 4 of the Central Excise (No. 2) Rules, 2001 mandates that no excisable goods on which duty is payable shall be removed without payment of duty from any place where they are produced or manufactured or from a warehouse unless otherwise provided. The refinery being a deemed warehouse, removal of petroleum products (emerging as intermediates) without payment of duty for captive consumption within the warehouse is otherwise provided under Rule 20. Explanation - II to Rule 4 cannot be invoked to deny this benefit to the refinery as deemed warehouse, as the relevant word used in that Explanation is 'factory' and not warehouse. A refinery, in the nature of its operations, must have 'deemed warehouse' status to enjoy the benefit of not having to pay duty on unmarketable intermediates which emerge during the course of manufacture of finished petroleum products and are captively consumed in such manufacture. The new Rules have got to be interpreted accordingly. Therefore the view taken in CPCL's earlier case 2005 (192) ELT 973 requires to be approved and followed in the present case.
7.3. The learned Counsel has also referred to Board's Circular No.354/66/01-TRU dated 21.6.2001 which made certain comments on the replacement of the Central Excise Rules, 1944 by new Rules. In the said Circular, CBEC observed that there was 'no basic change' of provisions.
The 'few amendments' were also listed in the Circular. The counsel has also relied on Order No. 21/2005 dated 27.9.2005 passed by the Commissioner of Central Excise, Mumbai - II in the case of Bharat Petroleum Corporation Ltd., wherein 'Refinery Gases' and 'Long Residues' resulting from the refining of petroleum were held to be not marketable and it was further held that, even if these products were assumed to be dutiable, M/s. BPCL were not required to pay duty on these intermediate products which were captively consumed within the refinery, as they had obtained permission of the Collector of Central Excise under the erstwhile Rule 143A of the Central Excise Rules, 1944.
In this view, a demand of duty on M/s. BPCL for a period prior to 01.07.2001 and a similar demand for the subsequent period were dropped.
It has also been pointed out that the 'Committee on Disputes', by a reasoned order, declined permission to CBEC to agitate the case before the Tribunal.
8. We have given careful consideration to the rival submissions. The argument of the learned SDR is that, under the new warehousing provisions (Rule 20 of the Central Excise (No. 2) Rules, 2001 and Rule 20 of the Central Excise Rules, 2002], petroleum refineries cannot claim to be 'deemed warehouses' in the absence of saving clause for the continued operation of the erstwhile Sub-rule (2) of Rule 140, Rule 143A and Rule 157 beyond 30.6.2001 and hence cannot claim any right or benefit under the Central Government's order dated 3.6.1969, which ceased to operate on 1.7.2001 with the supersession of the parent provision (Sub-rule (2) of Rule 140). On the other hand, the argument of the learned Counsel for the respondents is that, as the registration of the refinery under the old Rule 174 shall be deemed to have continued as registration under the new Rule 9(1) by virtue of the proviso to Rule 9(1), the Government's order dated 3.6.1969 containing mention of the licence issued under Rule 174 and conferring the status of 'deemed warehouse' on the refinery shall be deemed to have continued to be in force beyond 30.6.2001. In this view of the matter, the counsel has argued that the facility of removal of RFO without payment of duty within the refinery (deemed warehouse) was available to the respondents under Rule 20(1) of the new rules read with Notification 47/2001-CE(NT). After examining the relevant provisions of the old and new rules and other statutory provisions and case law cited by both sides, we are not able to accept the learned Counsel's argument.
9. As noted by this Tribunal in IOCL's case 2002 (144) ELT 209, there was a self-contained code embodied in Chapter VII of the Central Excise Rules, 1944 governing warehousing of petroleum products manufactured in a refinery. It was held, in that case, that a "refinery" so declared by the Central Govt. under Rule 140(2) was a "deemed warehouse" and therefore the warehousing provisions were applicable to it. It was also held that such provisions prevailed over the general provisions contained elsewhere in the Central Excise Rules, 1944. Accordingly, it was further held that, for purposes of payment of duty on petroleum products manufactured in a refinery, the relevant provision was Rule 157 and not Rule 9 of the Central Excise Rules, 1944 and hence the deeming provisions of Sub-rule (1) of the said Rule 9 were not applicable to removal of intermediate goods warehoused in a refinery and used in the manufacture of final products. On this basis, it was held that duty of excise was not leviable on petroleum products which were manufactured in a "refinery" so declared under Rule 140(2) and were captively consumed in the manufacture of other petroleum products.
This decision was rendered for a period prior to 1.7.2001 and the same was followed by the Tribunal in CPCL's case 2005 (187) ELT 34, again for a period prior to 1.7.2001. The latter decision [2005 (187) ELT 34] was affirmed by the Hon'ble Supreme Court [2007 (211) ELT 193 (SC)].
Thus the view taken by the Tribunal in the case of IOCL's refinery and followed in CPCL's case for the period prior to 1.7.2001 received the apex Court's stamp of approval.
10. That view - we may repeat - was that, for petroleum refineries, Rules 140, 143A and 157 contained in Chapter VII of the Central Excise Rules, 1944 provided a self-contained code and the general provisions like Rule 9 contained elsewhere in the Central Excise Rules, 1944 were not applicable to such refineries. With the supersession of the old rules by the Central Excise (No. 2) Rules, 2001, the self-contained code for petroleum refineries was no more in place as the rule-making authority did not provide any saving clause for the continued operation of the relevant provisions viz. Rules 140, 143A and 157 of the old rules. The Central Government's order dated 3.6.1969 issued under Sub-rule (2) of Rule 140 of the old rules conferring "deemed warehouse" status on the respondents' refinery also ceased to have force with the supersession of the parent rule (Rule 140) on 1.7.2001 without saving clause. Rule 32 (transitional provision) of the new rules did not protect the Government's order. This rule reads as under: RULE 32. Transitional provisions. -- Any circulars, instructions, standing orders, trade notices or other orders issued under the Central Excise Rules, 1944 by the Board, the Chief Commissioner or the Commissioner of Central Excise, and in force as on 30^th June, 2001, shall, to the extent they are relevant and consistent with these rules, be deemed to be valid and issued under the corresponding provisions of these rules.
The above rule deals only with circulars/instructions/orders/ trade notices issued by the Board and Chief Commissioners and Commissioners of Central Excise under the Central Excise Rules, 1944 and does not contain any reference to orders issued by the Central Government under the said Rules. Therefore the Central Government's order dated 3.6.1969 issued under the old Rule 140(2) cannot be said to have been validated under the above Rule 32 for any period beyond 30.6.2001, the date on which the old rule was superseded. Only those orders, circulars etc., specified in Rule 32 could be said to have been validated beyond 30.6.2001 and, that too, only to the extent they are relevant and consistent with the new rules.
11.1. Even if it be assumed that the Government's order declaring the respondents' unit as "refinery" under the old Rule 140(2) is also within the scope of "orders" mentioned in Rule 32 ibid, we are unable to accept the counsel's argument that it is "relevant and consistent" with Rule 20 (warehousing provision), Rule 9 (registration of private warehouse), Rule 4 (duty payable on removal) and Rule 8 (manner of payment) of the new rules. Our reasons follow.
11.2. Sub-rule (1) of Rule 20 provided the facility of removal of excisable goods without payment of duty from the factory of production to a warehouse or from one warehouse to another warehouse. It appears from Sub-rules (3) and (4) of Rule 20 that the factory of production and warehouse mentioned in Sub-rule (1) are separate premises. Sub-rule (3) says that the responsibility for payment of duty on the goods removed from the factory of production to a warehouse shall be upon the 'consignee' while Sub-rule (4) says that the responsibility for payment of duty on the goods despatched for warehousing but not received in the warehouse shall be upon the 'consignor'. It is evident from these provisions of Rule 20 that the "factory of production" and the "warehouse" mentioned in Sub-rule (1) are physically separate premises and cannot be fictionally merged into one. The position is also abundantly clear from the procedures, conditions etc. laid down by CBEC under Sub-rule (2) of Rule 20 vide Circular No. 579/16/2001 -CX ibid.
The learned Counsel has treated a refinery as both "factory of production" and "warehouse" so as to bring the Fuel Oil movements in the refinery within the scope of the phrase "removal of any excisable goods from the factory of production to a warehouse" in Rule 20(1). But this 'two-in-one' concept is alien to Rule 20 for the reasons already stated.
11.3. The learned Counsel has relied on the proviso to Sub-rule (1) of Rule 9 of the 2001 Rules in support of his claim that CPCL's refinery shall be deemed to be registered under Sub-rule (1) by virtue of its "registration" under the old Rule 174. Rule 9(1) and its proviso read as follows: RULE 9. Registration. -- (1) Every person, who produces, manufactures, carries on trade, holds private store-room or warehouse, or otherwise uses excisable goods, shall get registered: Provided that a registration obtained under Rule 174 of the Central Excise Rules, 1944 shall be deemed to be as valid as the registration made under this sub-rule for the purpose of these rules.
We note that the Government's order dated 3.6.1969 (issued under the old Rule 140) described the respondents' refinery as "covered by the licence in Form L.4 granted to them under Rule 174 of the said rules".
Obviously what had been obtained by them was a licence under Rule 174 as this rule stood in those days when the rule required manufacturers, traders and certain other specified categories of persons to take out licence from the department for conducting their business. The specified persons included "holders of private warehouses other than those in the licensed premises of a manufacturer". In the year 1992, the licensing scheme was replaced by the new regime of registration and, under the new Rule 174, manufacturers, holders of private warehouses etc. were required to get registered with the department.
This was a mandatory requirement to be complied with by the respondents also. The new Rule 174 (registration) nowhere provided that a holder of 'L4' licence issued under the old Rule should be deemed to be registered for purposes of the new provisions. The respondents have not produced any registration certificate issued under Rule 174 (as this rule stood on 30.6.2001) in respect of their refinery as factory of production or as private warehouse. Hence there is no question of the refinery being deemed (under the proviso to Rule 9(1) of the 2001 Rules) to be registered as warehouse under the said Rule 9(1) for the purposes of the 2001 Rules. To be registered or deemed to be registered under Rule 9(1), there must be a real warehouse as the concept of "deemed warehouse" has no place under the Central Excise (No. 2) Rules 2001. Therefore the erstwhile warehousing provisions for refineries are inconsistent with the new provisions.
11.4. Nothing contained in Rule 4 or Rule 8 of the new Rules is indicative of what the learned Counsel has referred to as legislative intent for continued operation of the old warehousing provisions for refineries beyond 30.6.2001. On the other hand, Explanation II to Rule 4 contains a deeming provision which, read with other provisions of the Rule, means that intermediate products (if excisable) captively consumed in the manufacture of final products in a factory are also dutiable unless otherwise provided as under Notification No. 67/95-CE.The respondents' fuel oil is, admittedly, an intermediate product emerging in the course of manufacture of finished petroleum products in the refinery and its excisability stands settled in favour of the Revenue vide para (6) of the apex Court's judgment in CPCL's case 2007 (211) ELT 193 (SC). Therefore what is consistent with the new Rules is the fact that a refinery is a factory of production of petroleum products and not a deemed warehouse.
12. For the reasons already recorded, we also reject the argument that Notification No. 47/2001-CE (NT) dated 26.6.2001 issued under Rule 20(1) facilitated clearance of RFO manufactured in a refinery, for captive use within the refinery without payment of duty. In relation to petroleum products manufactured in a refinery, the Notification only extended the facility of removal without payment of duty from the refinery (factory of production) to a warehouse outside the refinery vide Sl. No. 1 of the Table annexed to the Notification. Even this facility was withdrawn when the Notification was superseded by Notification No. 17/2004-CE (NT) dated 4.9.2004.
13. As rightly observed by the referring Bench, no part of Rule 20 of the 2001/2002 Rules has a provision corresponding to Sub-rule (2) of Rule 140 of the Central Excise Rules, 1944, whereunder the Central Govt. by order dated 3.6.1969 had declared the respondents' unit as a "refinery" thereby deeming it to be a warehouse registered under Sub-rule (1). Any deeming provision must be in express terms. Rule 20 nowhere says that a "refinery" so declared by the Central Govt. under the old Rule 140(2) shall continue to be "deemed warehouse". Hence the said order cannot, in terms of Rule 32 (transitional provision) of the 2001 Rules, be deemed to have been issued under Rule 20 of these Rules, nor can it be held that the said order is "relevant and consistent" with these rules. For this reason also, it has to be held that Rule 32 is not applicable to the order dated 3.6.1969 issued by the Central Govt.
14. The learned Counsel has made a feeble attempt to claim support from Section 6 of the General Clauses Act, 1897 to his submission that the supersession of Rule 140(2) of the Central Excise Rules, 1944 did not affect the 'deemed warehouse' status already acquired thereunder. We have found in the Central Excise Act a provision similar to Section 6 of the General Clauses Act and the same is Section 38A. Where specific provision exists in the Central Excise Act declaring the effect of amendments of rules, notifications and orders, Section 6 of the General Clauses Act has no application. We shall now refer to Section 38A of the Central Excise Act to fortify our point. This Section reads as under: Section 38A. Effect of amendments, etc., of rules, notifications of orders.-- Where any rule, notification or order made or issued under this Act or any notification or order issued under such rule, is amended, repealed, superseded or rescinded, then, unless a different intention appears, such amendment, repeal, supersession or rescinding shall not - (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any rule, notification or order so amended, repealed, superseded or rescinded; orP.V. Mohammad Barmay Sons v. Director of Enforcement cited by the learned SDR, we have got to enquire into the question whether the new Rules manifest any intention contrary to the superseded rules and, if such intention is found, Section 38A ibid cannot be applied. As an intention contrary to the one underlying the old Rules 140(2) and 143A appears from the 2001 Rules, Section 38A ibid is not a saving provision for the respondents to claim the benefit of the above old rules beyond 30.06.2001. There is no saving clause in the preamble to the 2001 Rules either. On the other hand, the preamble to the Central Excise Rules, 2002, contains a saving clause as follows: In exercise of the powers conferred by Section 37 of the Central Excise Act, 1944 (1 of 1944) and in supersession of the Central Excise (No. 2) Rules, 2001, except as respects things done or omitted to be done before such supersession, the Central Government hereby makes the following rules, namely:- In exercise of the powers conferred by Section 37 of the Central Excise Act, 1944 (1 of 1944) and in supersession of the Central Excise Rules, 1944, the Central Government hereby makes the following rules, namely:- Conspicuously, the words, "except as respects things done or omitted to be done before such supersession", are absent in the preamble to the Central Excise (No. 2) Rules, 2001. Obviously the rule-making authority did not intend to save anything already done under Rule 140(2) of the old Rules even by incorporating a saving clause in the preamble to the Central Excise (No. 2) Rules, 2001 while repealing the old Rules (Central Excise Rules, 1944). In other words, the Government had no intention to see that its order dated 3.6.1969 (issued under Rule 140(2) of the old rules) continued to be in force. As held by the Hon'ble High Court in Indorama case (vide supra), the Central Excise Rules 1944 ceased to have legal force when the Central Excise (No. 2) Rules, 2001 came into force. Where Rule 140(2) ceased to have effect, the Government's order issued thereunder could not survive.
15. The old Budget proposals, circulars etc. of the 1960s placed before us by the counsel only reflect the legislative intent behind Rules 140, 143A, 157 etc. of the Central Excise Rules 1944. A contrary intent is evident from the absence of saving provisions in the Central Excise (No. 2) Rules, 2001. We have also seen both sides relying on proceedings of the "Committee on Disputes". Suffice it to say that the decisions of that Committee have no precedent value for this Tribunal.
16. It appears that the statutory scheme specially made for refineries under Chapter VII of the Central Excise Rules, 1944 came to an end with the supersession of those rules on 1.7.2001. From 1.7.2001, in our view, petroleum products are on par with other excisable goods under the Central Excise (No. 2) Rules, 2001 and the Central Excise Rules, 2002 and, therefore, if M/s. Chennai Petroleum Corporation Limited want to claim exemption from payment of duty on RFO manufactured in their refinery and captively consumed in the manufacture of other petroleum products after 30.6.2001, they will have to fall back on Notification No. 67/95-CE and substantiate their claim thereunder. In this view of the matter, we hold that the decision in CPCL's case 2005 (192) ELT 973 to the effect that, even beyond 30.6.2001, their refinery is entitled to enjoy the benefits of the Old Rules 140, 143A and 157 by virtue of Rule 32 (transitional provision) of the Central Excise (No. 2) Rules, 2001 does not lay down the correct law.
We endorse the view expressed in the referral order. Referred issues are answered accordingly.
17. The Registry is directed to send the records to the regular Bench for final disposal of the appeal in view of our decision.