9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (11) TMI 656 - AT - Central ExciseDemand of duty on Sulphur purchased - N/N. 12/2012-CE dated 17 March 2012 - use of Sulphur for manufacture of Sulphuric Acid/Oleum which in turn is used in the Urea Plant for manufacture of Molten Urea - Revenue s objection is that the some quantity of Molten Urea is used as input for the manufacture of Malamine and therefore, the appellants are not entitled to benefit of notification - HELD THAT - The issue involved is identical to the issue decided in the appellant s own case GUJARAT STATE FERTILIZERS AND CHEMICALS LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE ST, VADODARA 2020 (2) TMI 1253 - CESTAT AHMEDABAD where it was held that There are no merit in the Revenue s arguments that benefit of Notification No. 12/2012-CE dated 17 March 2012 can be denied on the ground that during manufacture of Phosphoric Acid which in turn used in the manufacture of fertilizer and Phospho-gypsum is manufactured. Appeal allowed on the terms of aforesaid decision.
Issues Involved:
1. Use of Sulphur for the manufacture of Sulphuric Acid/Oleum and subsequently Molten Urea. 2. Use of Sulphur for the manufacture of Sulphuric Acid/Oleum and subsequently Ammonium Sulphate and Caprolactam. 3. Use of Sulphuric Acid in maintaining pH balance in cooling towers. 4. Use of Sulphuric Acid in the manufacture of Phosphoric Acid and Phospho Gypsum, which in turn is used to produce Ammonium Phosphate. Issue-wise Detailed Analysis: 1. Use of Sulphur for the Manufacture of Sulphuric Acid/Oleum and Subsequently Molten Urea: The appellant sought exemption under Notification No. 12/2012-CE for Sulphur used in the manufacture of Sulphuric Acid/Oleum, which is then used to produce Molten Urea. The Revenue's objection was that Molten Urea is also used to manufacture Melamine, which is not a fertilizer. However, it was established that Molten Urea itself is a chemical fertilizer, as held by the Hon’ble Apex Court in a previous case involving the appellant. The court emphasized that the express language of the exemption notification should be given due effect, and since Molten Urea is classified as a chemical fertilizer, the exemption is applicable. Thus, the exemption for Sulphur used in the manufacture of Urea was allowed. 2. Use of Sulphur for the Manufacture of Sulphuric Acid/Oleum and Subsequently Ammonium Sulphate and Caprolactam: The appellant argued that Sulphur used in the manufacture of Sulphuric Acid/Oleum, which is then used in the Caprolactam Plant, also produces Ammonium Sulphate, a chemical fertilizer. The Revenue's contention that Ammonium Sulphate is merely a by-product was rejected. The Hon’ble Delhi High Court had previously ruled that the exemption notification does not distinguish between primary and by-products. Since Ammonium Sulphate is a fertilizer, the exemption applies. However, the appellant admitted liability for Hydroxylamine Sulphate sold in the market, and the demand for duty on this was confirmed. 3. Use of Sulphuric Acid in Maintaining pH Balance in Cooling Towers: The appellant relied on previous decisions where the use of Sulphuric Acid in cooling towers for pH balance was deemed eligible for exemption. The Tribunal cited the case of Indo Gulf Fertilizers & Chemicals vs. CCE, where it was held that Sulphuric Acid used in cooling towers is used in relation to the manufacture of fertilizers and thus qualifies for exemption. The appeal was allowed in this regard. 4. Use of Sulphuric Acid in the Manufacture of Phosphoric Acid and Phospho Gypsum, which in Turn is Used to Produce Ammonium Phosphate: The appellant argued that Sulphuric Acid used to produce Phosphoric Acid, which is then used to manufacture Ammonium Phosphate, a fertilizer, should be exempt. The Revenue's objection regarding the by-product Phospho Gypsum was dismissed. The court referenced the case of National Organic Chemical Industries Limited, where it was held that the emergence of by-products does not negate the exemption for the primary product. The appellant admitted liability for Sulphur used in the manufacture of Phosphoric Acid sold in the market. The Tribunal found no merit in denying the exemption for Sulphur used in the manufacture of fertilizers. Penalty and Conclusion: No penalty under Section 11AC was imposed due to the absence of malafide intention and the interpretative nature of the issue. The demand was set aside except for the quantity of Sulphur used in the manufacture of Hydroxylamine Sulphate and Phosphoric Acid sold on payment of duty. The appeal was partly allowed, extending the benefit of limitation. Final Judgment: The issues involved in this case were identical to those in the appellant's previous case, and the appeal was allowed on the same terms as the previous order. The judgment was pronounced in open court on 17.11.2021.
|
