Gulf Oil Corporation Ltd. Vs. Commnr. of Central Excise - Court Judgment

Excerpt:
1. these two appeals arise out of the same impugned order, so they are being disposed of by a common order.2. we have heard shri s.c. mohanty, ld. advocate for the appellants in m/s gulf oil corporation ltd. and for the respondent in m/s i.d.l.industries ltd. we have also heard shri a.k. mondal, ld. sdr for the respondent in m/s gulf oil corporation ltd. and shri n.k. mishra, ld.jdr for the appellant in m/s i.d.l. industries ltd. 3. brief facts of the case are that the appellants manufacture explosives at the mining site of central coal field ltd. in mobile van called pump truck. the explosives so manufactured at the mining site by way of mixing different duty paid ingredients (inputs) are directly charged to the boreholes for the purposes carrying out blasting of coal. ld. advocate.....

Judgment:
1. These two appeals arise out of the same impugned order, so they are being disposed of by a common order.

2. We have heard Shri S.C. Mohanty, Ld. Advocate for the appellants in M/s Gulf Oil Corporation Ltd. and for the respondent in M/s I.D.L.

Industries Ltd. We have also heard Shri A.K. Mondal, Ld. SDR for the respondent in M/s Gulf Oil Corporation Ltd. and Shri N.K. Mishra, Ld.

JDR for the appellant in M/s I.D.L. Industries Ltd. 3. Brief facts of the case are that the appellants manufacture explosives at the mining site of Central Coal Field Ltd. in Mobile Van called pump truck. The explosives so manufactured at the mining site by way of mixing different duty paid ingredients (inputs) are directly charged to the boreholes for the purposes carrying out blasting of coal. Ld. Advocate submits that the present dispute relates to the period from May 1992 to December 1992 and as such comes into the Notification No. 182/87-CE. He submits that no duty is payable on the explosives manufactured by the appellants and used in the mining site during the period under dispute. The explosives manufactured at the mining site in Mobile Pump Truck (Workshop) and used therein are fully exempted from the payment of duty in terms of Notification No.182/87-CE dated 10th July, 1987 and the present Notification No.63/95-CE dated 16th March, 1995. He submits that the Mobile Pump Truck is covered under the expression "Workshop" used in the aforesaid Notification as clarified by CBEC. He submits that the Commissioner (Appeals) has not rightly appreciated the decision in the case of M/s Anil Chemicals & Industries Ltd. that the later Notification No.63/95-CE whereas the period under dispute is prior to the said Notification. He submits that the appeal may kindly be allowed with consequential relief.

4. In reply, Shri Mondal, Ld. SDR, submits that two Circulars issued on the different times are different in wordings and the ratio of the Anil Chemicals is not applicable in the present case. He further submits that the Mobile Pump Truck is not a "Workship" in terms of Notification No. 182/87. Therefore, he submits that the appeal may kindly be dismissed.

5. In the present case, the Commissioner (Appeals) of Central Excise, Ranchi has passed the impugned Order-in-Appeal, denying the benefit of exemption Notification No. 182/87-CE dated 10th July, 1987, is that the said Notification is slightly differently worded compared to Notification No. 63/95-CE dated 16th March, 1995 which was applicable to Anil Chemicals case.

6. For better appreciation of the Notifications contained of both the Notifications are as follows: "[Notification No. 182/87-CE dated 10.7.1987 as amended by Notification No. 234/88-CE, dated 27.7.1988] Exemption of goods produced in workshops situated at mines. - In exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts all goods, falling under the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), which are manufactured in workshops situated within the precincts of mines and also are intended for use in Mines, from the whole of the duty of excise leviable thereon which is specified in the said Schedule.

Explanation: For the purposes of this Notification, "mines" shall have the same meaning as in Clause (j) of Section 2 of the Mines Act, 1952 (35 of 1952).

Notification No. 63/95-CE dated 16.3.1995 as amended by Notification No. 11/96-CE dated 23.7.96: Exemption of goods manufactured by specified Units/Institutions for use by Government Department or Defence purposes: - In exercise of the powers conferred by sub-section (1) of Section 5A of the Central Excises and Salt Act, 1944 (1 of 1944), read with Sub-Section (3) of Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957), the Central Government, being satisfied that it is necessary in the public interests to do, hereby exempts, goods specified in column (2) of the Table hereto annexed, and falling under the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), subject to the conditions, if any, specified in the corresponding entry in column (3) of the said Table, from the whole of - All goods: If manufactured in workshops, situated within the precincts of mines and intended for use in such mines." 7. From perusal of the above Notifications, it is clear that both the above Notifications clearly convey the same meaning having been the same effect that the explosives manufactured within the mining area of the mines and used therein are exempted from the payment of duty. Both the Notifications were elaborately discussed in the case of Anil Chemicals and Industries Ltd. v. Commr. of Central Excise, BBSR, 2003 (56) RLT 935 (CEGAT-Mum), wherein the Tribunal has held as under: "As we have observed above the assessees did manufacture to prepare explosive which activity was undertaken in a van situated inside the mines. Notification No. 182/87-CE exempted goods manufactured in work shops situated in the precincts of mines and indeed for use in such mines. The present appellants were in correspondence with the Ministry regarding this exemption. In a letter F. No. 108/3/93-CX/3 dt. 7.7.94 the Deputy Secretary CBEC informed the appellants that the explosive manufactured by them in the mines would enjoy exemption under the said notifications. In a letter written to the Jurisdictional Commissioner vide the same file number and the same date the Board very clearly stated that "Mobile Van which carried the ingredients to the mines are is covered by exemption Notification No. 182/87". This was clearly in pursuance of an earlier Circular No. 22/90-CX.3 dt. 26.4.1990 which gave a wider interpretation to the terms "Workshop" for the interpretation of Notification No. 182/87." 8. In the present case also, the three ingredients of explosives are kept in three compartments of the van, so that they can be remained intact and no untoward incidents happened to explosives. The ratio of Anil Chemicals (supra) is applicable on the present case and it is squarely covered by Anil Chemicals' case. In view of the above discussions, the appeal deserves to be allowed.

9. Consequently, we set aside the order passed by the Commissioner (Appeals) and we allow the appeal with consequential relief to the appellants.