2005 (5) TMI 210 - AT - Central Excise

Summary

Issues:
1. Interpretation of Notification No. 126/94-C.E., dated 2-9-1994 for exemption of HSD Oil.
2. Eligibility of HSD oil usage for fork lifts and manufacturing processes under the notification.
3. Requirement of approval for duty-free procurement of consumables for captive generating sets.
4. Dispute over the usage of HSD oil for purposes other than approved under the notification.

Issue 1: Interpretation of Notification No. 126/94-C.E., dated 2-9-1994 for exemption of HSD Oil:
The case involved a Revenue appeal against the Order-in-Original granting exemption for HSD oil usage under Notification No. 126/94-C.E., dated 2-9-1994. The notification exempts excisable goods for export-related activities subject to specified conditions. The primary issue was to determine if the HSD oil usage by the company complied with the conditions outlined in the notification.

Issue 2: Eligibility of HSD oil usage for fork lifts and manufacturing processes under the notification:
The key contention revolved around whether the HSD oil procured for fueling fork lifts and manufacturing processes like heat treatment, dye preheating, and paint line materials qualified for exemption under the notification. The Commissioner concluded that since fork lifts were integral to the manufacturing operations of export products, the HSD oil used for them was eligible for the notification's benefit.

Issue 3: Requirement of approval for duty-free procurement of consumables for captive generating sets:
There was a discrepancy regarding the necessity of approval for duty-free procurement of consumables for captive generating sets. The judgment clarified that while approval was required for procuring consumables for captive generating sets, it was not mandatory for raw materials or consumables used in manufacturing processes related to export products.

Issue 4: Dispute over the usage of HSD oil for purposes other than approved under the notification:
The Revenue argued that using HSD oil for purposes other than captive generating sets violated the notification's conditions. However, the tribunal reasoned that as long as the HSD oil was utilized for approved purposes within the manufacturing operations of export products, the benefit of the notification could not be denied. The judgment emphasized that minor procedural discrepancies should not negate the benefit granted by the notification if the goods were appropriately accounted for and used as specified.

In conclusion, the tribunal upheld the Order-in-Original, rejecting the Revenue's appeal. The judgment highlighted the importance of adhering to the conditions of notifications for duty exemptions while emphasizing the broad interpretation of terms like "for the production or manufacture" and "in connection with the production, manufacture" under such notifications.