Birla Vxl Ltd. Vs. Commissioner of C. Ex. - Court Judgment

Excerpt:
1. shri r. sudhinder, learned counsel arguing the stay petition for waiver of pre-deposit of duty amounting to rs. 83,842/- submits that duty has been demanded on coal ash. he submits that coal ash has been held to be non-excisable. in support of this contention he refers to the judgment contained in final order no. 121/89-b, dated 21-4-1989 in the case of swadeshi cotton mills ltd. learned counsel submits that the appellate tribunal had held that cinder ash was not excisable. he submits that this decision of the tribunal has been upheld by the apex court as the appeal filed by the commissioner of central excise against the aforesaid final order was dismissed by the apex court as reported in 1996 (82) e.l.t. a160. learned counsel further submits that the hon'ble gujarat high court in the case of ahmedabad electricity company ltd. v. union of india reported in 2001 (131) e.l.t.' 535 held that coal ash 'cinder' obtained by burning of coal in boiler during the course of generation of electric power or for heating for manufacture of starch and other maize product, cinder so obtained would only be a residue of burnt-up coal and cannot be said to be excisable as other ash falling under heading 26.21 of the central excise tariff act, 1985.learned counsel, therefore, submits that this decision of the hon'ble gujarat high court was followed by the hon'ble bombay high court in the case of century rayon v. union of india reported in 2002 (142) e.l.t.319 wherein it was held that cinder obtained by way of waste product during the generation of steam was not excisable. learned counsel submits that in view of the above decisions pre-deposit of duty may be waived and the appeal itself may be heard.2. shri atul saxena, learned dr appearing for revenue submits that there is a recent board's circular no. 386/19/98-cx., dated 7-4-1998 which clarified that coal ash was excisable. learned dr submits that in view of this clarification given by the board coal ash was excisable and therefore, the authorities have rightly confirmed the demand of duty. he, therefore, prayed that the applicant may be directed to deposit the entire amount of duty.3. in rejoinder about the board's circular dated 7-4-98 the learned counsel for the applicant submits that this circular issued by the board was considered by the hon'ble gujarat high court while coming to the conclusion that coal ash (cinder) was not excisable. he, therefore, prayed that no credence can be given to this circular when there are high court orders.4. we have carefully considered the submissions made by both the sides.we have also perused the case law cited and relied upon by the learned counsel for the applicant. we note that the applicant has been able to make out a prima facie for waiver of pre-deposit of duty. therefore, pre-deposit of duty is waived.

Judgment:
1. Shri R. Sudhinder, learned Counsel arguing the stay petition for waiver of pre-deposit of duty amounting to Rs. 83,842/- submits that duty has been demanded on coal ash. He submits that coal ash has been held to be non-excisable. In support of this contention he refers to the judgment contained in Final Order No. 121/89-B, dated 21-4-1989 in the case of Swadeshi Cotton Mills Ltd. Learned Counsel submits that the Appellate Tribunal had held that cinder ash was not excisable. He submits that this decision of the Tribunal has been upheld by the Apex Court as the appeal filed by the Commissioner of Central Excise against the aforesaid Final Order was dismissed by the Apex Court as reported in 1996 (82) E.L.T. A160. Learned Counsel further submits that the Hon'ble Gujarat High Court in the case of Ahmedabad Electricity Company Ltd. v. Union of India reported in 2001 (131) E.L.T.' 535 held that coal ash 'Cinder' obtained by burning of coal in boiler during the course of generation of electric power or for heating for manufacture of starch and other maize product, cinder so obtained would only be a residue of burnt-up coal and cannot be said to be excisable as other ash falling under Heading 26.21 of the Central Excise Tariff Act, 1985.

Learned Counsel, therefore, submits that this decision of the Hon'ble Gujarat High Court was followed by the Hon'ble Bombay High Court in the case of Century Rayon v. Union of India reported in 2002 (142) E.L.T.319 wherein it was held that cinder obtained by way of waste product during the generation of steam was not excisable. Learned Counsel submits that in view of the above decisions pre-deposit of duty may be waived and the appeal itself may be heard.

2. Shri Atul Saxena, learned DR appearing for Revenue submits that there is a recent Board's Circular No. 386/19/98-CX., dated 7-4-1998 which clarified that coal ash was excisable. Learned DR submits that in view of this clarification given by the Board coal ash was excisable and therefore, the authorities have rightly confirmed the demand of duty. He, therefore, prayed that the applicant may be directed to deposit the entire amount of duty.

3. In rejoinder about the Board's Circular dated 7-4-98 the learned Counsel for the applicant submits that this Circular issued by the Board was considered by the Hon'ble Gujarat High Court while coming to the conclusion that coal ash (cinder) was not excisable. He, therefore, prayed that no credence can be given to this circular when there are High Court orders.

4. We have carefully considered the submissions made by both the sides.

We have also perused the case law cited and relied upon by the learned Counsel for the applicant. We note that the applicant has been able to make out a prima facie for waiver of pre-deposit of duty. Therefore, pre-deposit of duty is waived.