2007 (4) TMI 534 - AT - Central Excise

Summary

Issues involved:
Interpretation of exemption notifications u/s 1/95-C.E. and 53/97-Cus. for procurement/import of furnace oil by a 100% EOU.

Summary:
The Department appealed against the Commissioner's order regarding the eligibility of duty-free procurement/import of furnace oil by a 100% EOU under exemption notifications. The appellant company, engaged in textile manufacturing, had been procuring/importing furnace oil without duty payment claiming it as a consumable. Amendments in 1998 specifically made furnace oil eligible for exemption. The excise authorities challenged the eligibility based on the amendments, proposing duty demand and penalties. The Commissioner, however, dropped the proceedings, stating that furnace oil was a consumable covered by the notifications. The Department argued that the amendments made the interpretations redundant and that fuels for boilers were not consumables. The respondent cited precedents supporting the eligibility of furnace oil as a consumable for EOUs.

The Tribunal considered the submissions and noted that prior to the amendments, the appellant had procured furnace oil as consumables. The Development Commissioner had also permitted the procurement as consumables. Precedents like Jayant Agro Organics Ltd. and Tata Tea Ltd. had established furnace oil as a consumable for EOUs. The Tribunal quoted the finding from Tata Tea Ltd., emphasizing that furnace oil used as fuel for boilers and eventually consumed fell under the category of consumables. The Tribunal upheld the Commissioner's decision, stating that the precedents' ratio applied to the present case, and no valid grounds existed to interfere with the findings. Consequently, the Department's appeals were rejected, and the cross-objection was disposed of accordingly.