2003 (9) TMI 477 - AT - Central Excise

Summary

Issues:
Prayer to dispense with predeposit of duty and penalty based on Notification No. 67/95-C.E. for gases allowed to escape in the atmosphere.

Analysis:
The case involved three Stay Petitions seeking exemption from predeposit of duty and penalty totaling Rs. 2,05,216.00 and Rs. 1.00 lakh respectively, based on the applicability of Notification No. 67/95-C.E. The petitioners argued that gases allowed to escape during the manufacturing process should be considered captively used, thus eligible for the notification's benefit. They relied on a Tribunal decision and a Board's Circular to support their claim.

Revenue's Argument:
The Revenue, represented by the J.D.R., contended that the gas released into the atmosphere did not qualify as captively used, as it was a final product utilized for equipment maintenance. The Commissioner (Appeals) supported this view, asserting that the escaped gas could not be deemed captively consumed.

Petitioners' Rebuttal:
In response, the petitioners' counsel emphasized that the gas filled in cylinders constituted their final product, contrary to the Revenue's assertion. They challenged the appellate authority's interpretation of the escaped gas as the final product itself.

Judgment:
The Tribunal analyzed both sides' contentions and the relevant legal provisions. It noted that the escaped gas was not utilized in manufacturing any other product, thus not meeting the captive consumption criteria under Notification No. 67/95-C.E. The Tribunal differentiated the current case from the precedent cited by the petitioners, stating that the circumstances were distinct. Additionally, the Board's Circular referenced by the petitioners was deemed inapplicable by the Commissioner (Appeals) and upheld by the Tribunal. Notably, the petitioners did not claim financial hardship. Consequently, the Tribunal directed the petitioners to deposit Rs. 1.00 lakh towards duty within six weeks, with the remaining duty and penalty waived pending appeal.

Conclusion:
The Tribunal scheduled a compliance check and final disposal of the appeals for 24-11-2003. The judgment clarified the non-applicability of the notification to gases released into the atmosphere during the manufacturing process, emphasizing the lack of captive usage for such gases in subsequent production.