Silverchem Industries Pilot Vs. Commissioner of Central Excise - Court Judgment

Excerpt:
1. shri m.h. patil, ld. advocate appeared on behalf of the appellant and submitted that there is a total duty demand of rs. 55,95,794/- on lpg on the ground that the appellant has conducted the manufacturing activity by mixing propane and butane gas. when butane is blended with propane by raising pressure, without doing this it cannot be marketed as lpg. these propane and butane are mixtures of hydrocarbons which are gaseous at normal and ambient temperature but can be liquefied at normal temperature by application of moderate pressure, then only can be termed as lpg. the ld. advocate has relied in support of his case on cce v. goyal gases (p) ltd. reported in 2000 (119) e.lt.5 (s.c.) and claimed that the activity undertaken by the appellant does not amount to manufacture. he also submitted that note 10 to chapter 27 which deals with the manufacture with effect from 12.5.2000 is applicable only to cng and hot lpg. he also claimed that duty and modvat benefit is to be given in view of cce vs. maruti udyog ltd. reported in 2002 (141) e.l.t.3 (s.c.) and after taking into account the credit amount of rs. 38 lakhs and 4 lakhs of cum-duty benefit. therefore he contended that pre-deposit may be waived.2. shri. sanjay singhal, ld. jdr appearing on behalf of the revenue drew our attention to para 31 of the impugned order and submitted that in view thereof the activity undertaken by the appellant fully amounts to manufacture and they are liable to make full deposit as they have evaded duty.3. after hearing both sides, perusal of the records and case laws relied on by the ld. advocate, we find that the appellant has not made out a strong prima facie case for the total waiver of the duty amount.we, therefore, direct the appellant to deposit rs. 15 lakhs towards duty amount and report compliance by 26.5.2004. on such pre-deposit, we dispense with and waive further pre-deposit of balance amount of duty and entire amount of penalty. it may be noted that failure to make pre-deposit by the said date will result in dismissal of the appeal without any further notice to the appellant.

Judgment:
1. Shri M.H. Patil, Ld. Advocate appeared on behalf of the appellant and submitted that there is a total duty demand of Rs. 55,95,794/- on LPG on the ground that the appellant has conducted the manufacturing activity by mixing propane and butane gas. When Butane is blended with propane by raising pressure, without doing this it cannot be marketed as LPG. These propane and butane are mixtures of hydrocarbons which are gaseous at normal and ambient temperature but can be liquefied at normal temperature by application of moderate pressure, then only can be termed as LPG. The Ld. Advocate has relied in support of his case on CCE v. Goyal Gases (P) Ltd. reported in 2000 (119) E.LT.5 (S.C.) and claimed that the activity undertaken by the appellant does not amount to manufacture. He also submitted that Note 10 to Chapter 27 which deals with the manufacture with effect from 12.5.2000 is applicable only to CNG and hot LPG. He also claimed that duty and modvat benefit is to be given in view of CCE vs. Maruti Udyog Ltd. reported in 2002 (141) E.L.T.3 (S.C.) and after taking into account the credit amount of Rs. 38 lakhs and 4 lakhs of cum-duty benefit. Therefore he contended that pre-deposit may be waived.

2. Shri. Sanjay Singhal, Ld. JDR appearing on behalf of the Revenue drew our attention to para 31 of the impugned order and submitted that in view thereof the activity undertaken by the appellant fully amounts to manufacture and they are liable to make full deposit as they have evaded duty.

3. After hearing both sides, perusal of the records and case laws relied on by the Ld. Advocate, we find that the appellant has not made out a strong prima facie case for the total waiver of the duty amount.

We, therefore, direct the appellant to deposit Rs. 15 lakhs towards duty amount and report compliance by 26.5.2004. On such pre-deposit, we dispense with and waive further pre-deposit of balance amount of duty and entire amount of penalty. It may be noted that failure to make pre-deposit by the said date will result in dismissal of the appeal without any further notice to the appellant.