2015 (6) TMI 157 - SC - Central Excise

Benefit of Notification No. 6/2000 dated 01.03.2000 - Classification of goods - Classification under Chapter Heading 2711.12 or under chapter sub-heading 2711.19 - Held that - Both the authorities below have entered into the various facets of the dispute and gone into the entire gamut of controversy. Many of the findings of the Commissioner in his order have not found favour with the CESTAT in the impugned decision rendered by it. We have heard learned counsel for the parties on all the aspects and have gone through the orders minutely through which we were taken by the learned counsel appearing for the parties. We are, however, of the opinion that it is not necessary to even advert to all those aspects of the matter inasmuch as the fulcrum of the dispute pertains to the interpretation which is to be accorded to the language used in Notification No. 6/2000 which confers, partial exemption. In the Sl. No. 24 of Notification No. 5/2000, there is no comma after the words gaseous hydrocarbons . Therefore, the expression other than appearing after the words gaseous hydro carbons and before the words natural gas would qualify only the words natural gas . - Insofar as Indian Oil Corporation is concerned, the only difference is that it is manufacturing a product known as propylene. Since it is also one of the products which qualifies for partial exemption from payment of duty by Notification No. 6/2000 dated 01.03.2000, result in both the cases would be the same. - Decided against Revenue.

Summary

Issues:
Classification of product under Central Excise Tariff Act, 1985 - Interpretation of Notification No. 6/2000 - Benefit of partial exemption - Eligibility of Indian Petrochemical Corporation Limited (IPCL) and Indian Oil Corporation.

Classification of Product:
The case involved the classification of C4 Raffinate manufactured by IPCL under the Central Excise Tariff Act, 1985. The Department argued that the product should be classified under Chapter Heading 2711.12 as butylene, demanding excise duty at 16%. IPCL claimed the benefit of Notification No. 6/2000, paying 8% duty. The dispute centered around the correct classification of the product.

Interpretation of Notification No. 6/2000:
The key issue was the interpretation of Notification No. 6/2000, which provided partial exemption to "Liquefied Petroleum gases and other gaseous hydrocarbons other than natural gas, ethylene, propylene, butylene and butadiene." IPCL argued that the exemption applied to products excluding natural gases and other specified hydrocarbons. The Court agreed with IPCL's interpretation, emphasizing the exclusion of specific hydrocarbons mentioned in the notification.

CESTAT Decision and Analysis:
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled in favor of IPCL, rejecting the Department's contention. The Tribunal's interpretation of the notification highlighted the exclusion of natural gas and specific hydrocarbons, supporting IPCL's position. The Court upheld CESTAT's decision, emphasizing the correct interpretation of the notification language.

Indian Oil Corporation's Case:
Indian Oil Corporation, manufacturing propylene, also qualified for partial exemption under Notification No. 6/2000. The judgment stated that the outcome for Indian Oil Corporation mirrored that of IPCL. Consequently, all appeals by the Department were dismissed, affirming the eligibility of IPCL and Indian Oil Corporation for the benefit of partial exemption under the notification.

In conclusion, the Supreme Court's judgment clarified the classification of products under the Central Excise Tariff Act, 1985 and underscored the importance of interpreting exemption notifications accurately. The decision favored IPCL and Indian Oil Corporation, emphasizing the exclusion of specific hydrocarbons for partial exemption eligibility under Notification No. 6/2000.