2006 (3) TMI 567 - AT - Central Excise

Summary

Issues:
1. Demand of duty under Notification 5/98-CE for the period August 2003 to January 2004.
2. Eligibility for exemption under Notification 5/98-CE based on the use of Low Sulphur Heavy Stock (LSHS) for generating electrical energy.
3. Parity between the present case and an earlier case regarding waiver of pre-deposit and stay of recovery.
4. Granting waiver of pre-deposit and stay of recovery following a previous Stay order.
5. Urgency in disposing of both appeals due to the high stake involved.

Analysis:

1. The judgment deals with the demand of duty amounting to over Rs. 60 lakhs from the appellants for the period August 2003 to January 2004. The demand was raised by denying the benefit of exemption under Notification 5/98-CE, dated 2-6-98, which extended exemption to LSHS intended for use as fuel for electrical energy generation by Central Govt. Electrical Undertakings. The adjudicating authority found that the appellants did not fulfill the exemption requirement as they used part of the generated electricity for captive purposes.

2. The issue of eligibility for exemption under Notification 5/98-CE was raised concerning the use of LSHS for generating electrical energy. The exemption under Serial No. 19 of the Notification excluded those producing electricity for their own consumption or for their own Undertakings without sale. The appellants' use of part of the electricity generated for captive purposes led to the denial of exemption, as highlighted by the adjudicating authority.

3. The judgment discusses the parity between the present case and an earlier case where waiver of pre-deposit and stay of recovery were allowed to the appellants. The Counsel for the appellants argued for parity based on a previous Stay order, while the JCDR contested, pointing out differences in the present case. However, it was noted that the factual aspect highlighted by the JCDR was also involved in the earlier case, leading to the grant of waiver of pre-deposit and stay of recovery.

4. Following the Stay order passed in a previous appeal, waiver of pre-deposit and stay of recovery of the duty demanded and penalty imposed was granted. This decision was made in line with the earlier case involving M/s. Neyveli Lignite Corporation Ltd., where similar relief was provided based on the Stay order.

5. Due to the significant amounts involved in both appeals, with one having a demand of duty over Rs. 6.28 crores and an equal amount of penalty, and the other involving a demand of duty over Rs. 60 lakhs, urgency was emphasized in disposing of both appeals promptly. As per the request of the JCDR and without opposition, both appeals were directed to be posted for final hearing on a specified date to expedite the resolution process.