2002 (1) TMI 1050 - AT - Central Excise

Summary

Issues:
Interpretation of Notifications for concessional rate of duty on Kerosene cleared to industrial users, applicability of end-use parameters, and understanding the term "ordinarily used as an illuminant in oil burning lamps."

Analysis:
1. Interpretation of Notifications: The appellants, manufacturers of petroleum products including Kerosene, contested the denial of concessional duty rates under Notifications 5/98-C.E. and 5/99-C.E. for Kerosene supplied to industrial users. The dispute arose from the department's contention that the concessional rate applied only to Kerosene for domestic users using it in oil burning lamps, not for industrial use.

2. Applicability of End-use Parameters: The department issued show cause notices proposing recovery of differential duty amounts and penalties for alleged contravention of Central Excise Rules. The lower authorities upheld the department's stance that concessional duty was only for Kerosene used by domestic users in oil lamps, not for industrial use. The appellants argued that a significant portion of Kerosene supplied through the Public Distribution System (PDS) was used for illumination, justifying the concessional rate.

3. Understanding the Term "Ordinarily Used": The appellants contended that the term "ordinarily used as an illuminant in oil burning lamps" should not be interpreted based on actual use but on the product's classification and description. They argued that the Tariff classification and Notification description aligned, warranting the concessional rate. The department emphasized the importance of end-use parameters and argued that industrial use did not qualify for the concessional rate.

4. Judgment: The Tribunal analyzed the Notifications, Tariff entries, and the context of the term "ordinarily used." It concluded that Kerosene cleared to industrial users, constituting about 1% of total production, did not meet the criteria of being ordinarily used in oil lamps. The Tribunal rejected the appellants' arguments, stating that the socio-economic context of the term in the Notifications supported the denial of concessional rates for industrial use. The decision of the lower authorities denying the benefit of the Notifications was upheld, and the appeals were rejected.