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2012 (8) TMI 909 - HC - Central ExciseBenefit under Notification No. 14 of 1997, dated 3rd May, 1997 - Whether the duty payable with regard to Residual Fuel Oil (RFO) and Low Sulphur Heavy Stock (LSHS) shall be the same or not - Held that - From the plain reading of the aforesaid notification it appears that RFO does not fall within the six items which have been included under the separated, with regard to Modvat credit. The Tribunal had relied upon the notification dated 3rd May, 1997 and reversed the findings of adjudicating authority. The findings recorded by Tribunal seems to be based on the consideration of notification dated 3rd May, 1997, proviso to which includes only naphtha, furnace oil, low sulphur heavy stock, light diesel oil, bitumen and paraffin wax. These six items had been taken out under Chapter 27 of the Schedule to the Central Excise Tariff Act, 1985 giving them different status with regard to different restricted Modvat tariffs. RFO is not covered under the proviso in question. - no substantial question of law involved, which may call for any interference under Section 35H of the Central Excise Act - Decided in favour of assessee.
Issues involved: Determination of duty payable on Residual Fuel Oil (RFO) and Low Sulphur Heavy Stock (LSHS) under Notification No. 14 of 1997.
Analysis: 1. Issue of Duty Payable: The primary issue in this case revolved around the determination of duty payable on Residual Fuel Oil (RFO) and Low Sulphur Heavy Stock (LSHS) under Notification No. 14 of 1997. The Adjudicating authority initially concluded that RFO and LSHS are the same product, thus attracting a duty rate of 10%. However, the respondent argued that LSHS is distinct and not covered by the said notification. The Tribunal supported this argument, emphasizing that LSHS is not listed in the notification, which specifically mentions naphtha, furnace oil, low sulphur heavy stock, light diesel oil, bitumen, and paraffin wax as items subject to restricted Modvat credit. Therefore, the duty payable on RFO and LSHS differed based on their classification under the notification. 2. Interpretation of Notification: The interpretation of Notification No. 14 of 1997 played a crucial role in the judgment. The Tribunal's decision was based on a meticulous analysis of the notification, which excluded RFO from the list of specified items eligible for restricted Modvat credit. The Tribunal's reliance on the specific wording of the notification, which did not mention RFO but included LSHS, supported the conclusion that LSHS should be treated differently for duty calculation purposes. This interpretation highlighted the importance of precise language in legal provisions and the impact it can have on the classification and taxation of goods under the Central Excise Act, 1944. 3. Absence of Substantial Question of Law: Ultimately, the High Court found that there was no substantial question of law warranting interference under Section 35H of the Central Excise Act. The Court concurred with the Tribunal's interpretation of the notification and the differentiation between RFO and LSHS for duty calculation. As a result, the reference application was disposed of without any further legal intervention, indicating a clear resolution of the duty determination issue based on the specific provisions of Notification No. 14 of 1997. In conclusion, the judgment focused on the precise wording and scope of Notification No. 14 of 1997 to determine the duty payable on Residual Fuel Oil (RFO) and Low Sulphur Heavy Stock (LSHS). The differentiation between these products under the notification led to a distinct duty rate for LSHS, emphasizing the importance of accurate interpretation of legal provisions in tax matters. The absence of any substantial legal question further solidified the decision, highlighting the clarity and specificity of the notification in question.
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