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2016 (12) TMI 1220 - AT - Central ExciseFurnance Oil - earlier claimed as feedstock as per N/N. 5/19998-CE dt 2/6/1998 - Appellant has now taken alternative additional grounds that 40% of the FO was actually used as feed Stock and for the remaining quantity of FO also either 5% or 8% duty rate of duty will be applicable as per Sr No. 15 of the table to Notification No. 5/98-CE & 5/99-CE - is the contention of appellant justified? - Held that - It is observed from the case records that both Sr No. 14 & 15 of the table annexed to N/N. 5/99-CE are subject to certain conditions. Further the quantities claimed to be used as feed stock or for other purposes also needs verification. Onus of claiming an exemption notification is on the assessee to satisfy that all the conditions of an exemption notification, including the quantities claimed to be entitled to exemption - matter remanded to Adjudicating authority - appeal allowed by way of remand.
Issues:
- Interpretation of duty rates on Furnace Oil (FO) used for manufacturing fertilizers - Applicability of Notification No. 5/1998-CE and Notification No. 5/1999-CE - Verification of the quantity of FO used as feedstock - Onus of claiming exemption notification and conditions fulfillment Interpretation of Duty Rates on Furnace Oil (FO): The appellant contested two show cause notices regarding the duty rates on Furnace Oil (FO) used in fertilizer manufacturing. Initially, the duty rate was NIL if FO was used as feedstock and 5% if used for other purposes, as per Notification No. 5/1998-CE. Subsequently, the rate was increased to 8% under Notification No. 5/1999-CE. The appellant relied on a Patna High Court order, which was later reversed by the Apex Court. The appellant argued that 40% of the FO was used as feedstock, attracting exemption under Sr. No. 14 of Notification No. 5/1998-CE, while the remaining quantity should be subject to the 5% or 8% duty rate under Sr. No. 15 of the table to the notification. Applicability of Notifications and Verification: The Revenue contended that the additional grounds raised by the appellant were not presented before the adjudicating authority. There were concerns about the actual usage of FO for generating electricity/steam and the verification of the claimed 40% usage as feedstock. The Tribunal observed that both Sr. No. 14 and 15 of the table in Notification No. 5/1999-CE have specific conditions. The quantities claimed for exemption needed verification, and the onus of proving exemption conditions fell on the appellant. Onus of Claiming Exemption and Remand Order: After reviewing the case records, the Tribunal noted the need for verification and remanded the case back to the Adjudicating authority. The appellant was directed to present their alternative claims and satisfy the conditions of the exemption notification. The Tribunal clarified that it had not made any observations on the case's merits, leaving all issues open for the adjudicating authority to consider. The appeal was allowed for remand, providing the appellant with an opportunity to explain their case, with the Tribunal disposing of the Miscellaneous Application filed by the appellant. In conclusion, the Tribunal's order allowed the appeal for remand to the Adjudicating authority for a fresh adjudication, emphasizing the appellant's responsibility to demonstrate compliance with exemption conditions and presenting alternative claims. The case was remanded to ensure proper verification and consideration of all relevant issues by the Adjudicating authority.
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