2002 (12) TMI 459 - AT - Central Excise

Summary

Issues:
1. Eligibility for refund under Rule 173L(3)(iii) of the CE Rules, 1944.
2. Classification of Sulphuric Acid and Hydrofluoric acid under the same category of goods.
3. Exemption under Notification No. 217/86 for Sulphuric Acid.

Eligibility for Refund under Rule 173L(3)(iii) of the CE Rules, 1944:
The appeal was filed by the Revenue against the Order-in-Appeal where the Commissioner allowed the appeal of the respondents-assessee for refund. The Revenue argued that the assessee would not be eligible for a refund under Rule 173L(3)(iii) of the CE Rules, 1944. The learned Counsel for the assessee referred to the findings of the Commissioner (Appeals) and the judgment of the East Zonal Bench of CEGAT, Kolkata, which interpreted the term "same class" in a broader sense. As both the acids were considered to be of the same class, the refund was granted by the Commissioner (Appeals).

Classification of Sulphuric Acid and Hydrofluoric acid:
The Commissioner (Appeals) extensively analyzed the issue and allowed the refund by holding that Sulphuric Acid and anhydrous hydrofluoric acid fall under the same category of goods. The Commissioner relied on definitions from the Condensed Chemical Dictionary, stating that all acids contain hydrogen and have specific properties. The decision cited by the appellants in the case of Tata Tea Ltd. v. CCE defined the term "class" as a group with common characteristics. Based on these definitions and previous CEGAT decisions, it was concluded that Sulphuric acid and anhydrous hydrofluoric acid belong to the same class of goods for the purpose of Rule 173L.

Exemption under Notification No. 217/86 for Sulphuric Acid:
Regarding the entitlement to Notification No. 217/86, it was established that if the inputs are manufactured in the factory and consumed in the manufacture of a dutiable final product, exemption under the notification is available. In this case, the returned sulphuric acid was upgraded and utilized in the manufacture of anhydrous hydrofluoric acid, which was subsequently cleared on payment of duty. Therefore, the exemption under Notification No. 217/86 was deemed applicable to the sulphuric acid. The judgment of the East Zonal Bench of CEGAT, Kolkata in a similar case was found to be applicable, and the order granting the refund was upheld, rejecting the Revenue's appeal.