2011 (8) TMI 712 - AT - Central Excise

Furnace oil procured and used by 100% EOU is eligible for exemption under Notification 1/95 dated 4.1.95 as a raw material/consumable - Held That - In view of Jayant Agro vs. CCE (2003 - TMI - 52038 - CESTAT WEST ZONAL BENCH MUMBAI) decided in favour of assessee

Summary

Issues:
1. Eligibility of furnace oil procured by 100% EOU for exemption under Notification 1/95 dated 4.1.95.

Analysis:
The case involved two appeals filed by the Commissioner of Central Excise against an Order-in-Appeal passed by the Commissioner of Central Excise (Appeals). The respondents, manufacturers of cotton fabrics, were availing the benefit of Central Excise exemption under Notification 1/95 for capital goods, raw materials, and consumables. The dispute arose regarding the eligibility of furnace oil procured by the respondents without payment of duty for the exemption. A show-cause notice was issued demanding duty amounting to Rs.4,55,465/- along with interest and penalties. The Additional Commissioner confirmed the demand and imposed penalties. However, the Commissioner (Appeals) allowed the appeal, setting aside the adjudication order. The Revenue appealed against this decision.

During the proceedings, the Revenue argued that the furnace oil procured by the respondents was not eligible for exemption under Notification 1/95, as previously held by the Additional Commissioner. On the other hand, the respondent's representative cited a Tribunal decision and a Supreme Court confirmation, stating that furnace oil used by 100% EOU as fuel is entitled to exemption under the said Notification. After considering the arguments and case records, the Tribunal found that the issue was settled by the Tribunal's previous decision in a similar case, which was also confirmed by the Supreme Court. Therefore, the Tribunal held that the respondents were indeed eligible for exemption under Notification 1/95 for the furnace oil. Consequently, the appeal of the Revenue was dismissed, and cross-objections were also disposed of.

In conclusion, the judgment clarified the eligibility of furnace oil procured and used by 100% EOU for exemption under Notification 1/95 dated 4.1.95, based on previous Tribunal decisions and Supreme Court confirmation. The Tribunal's decision favored the respondents, upholding their entitlement to the exemption and dismissing the Revenue's appeal.