2004 (9) TMI 487 - AT - Central Excise

Summary

Issues:
1. Duty demand on Hydrochloric Acid (HCL) under Notification No. 217/86-C.E.
2. Interpretation of captive consumption notification for intermediate products.
3. Applicability of Board's Circular No. 17/93-CX. 8 and previous tribunal decisions.

Analysis:
1. The judgment addresses the duty demand on Hydrochloric Acid (HCL) under Notification No. 217/86-C.E. The appellant argued that HCL was cleared for captive consumption without duty payment for manufacturing demineralised water, which was exempt from duty. The appellant contended that various intermediate products, including HCL, arise during the manufacture of the final product HDPE PVC. Referring to Board's Circular No. 17/93-CX. 8 and previous tribunal decisions, the Tribunal held that exemption may be allowed for intermediate products used in the manufacturing process, provided they are listed in the Notification. As the intermediate products in question were different from those listed, the duty demand was deemed unsustainable.

2. The judgment delves into the interpretation of the captive consumption notification concerning intermediate products. Citing the Tribunal's decision in the case of Rashtriya Ispat Nigam Ltd. v. CCE, Vishakapatnam and the circular issued by the Board, the Tribunal emphasized that exemption under the notification can be granted for multiple intermediate products used in the manufacturing process if they align with the specified criteria. In this case, since the intermediate products did not match those listed in the Notification, the duty demand was invalidated.

3. The judgment also considers the applicability of Board's Circular No. 17/93-CX. 8 and previous tribunal decisions. By referencing the circular and tribunal rulings, such as the case of Sturdy Polymers Ltd., the Tribunal concluded that the duty demand was not sustainable and set aside the penalty imposed on the appellants. The decision was based on the consistent interpretation of the law provided by the Board and previous judicial precedents, ensuring a fair and just outcome for the appellant.