1987 (5) TMI 135 - AT - Central Excise

Summary

Issues involved: Allegation of misuse of Notification No. 81/75 by the appellant company in the use of sulphuric acid in the manufacture of phosphoric acid for Sodium Hexa-Meta Phosphate (SHMP) and fertilizers.

Summary:
The judgment by the Appellate Tribunal CEGAT, New Delhi addressed two matters concerning the alleged misuse of Notification No. 81/75 by the appellant company in using sulphuric acid in the production of phosphoric acid for SHMP and fertilizers. The Collector had imposed duty and penalties based on the belief that phosphoric acid is distinct from fertilizers, falling under separate tariff items. However, a previous order by the Central Board of Excise and Customs had ruled in favor of the appellant, stating that the use of sulphuric acid in the production of SHMP ultimately contributes to the manufacture of fertilizers. The Tribunal noted that the Collector's decision was influenced by a pending appeal, and after considering all arguments, it was concluded that the use of sulphuric acid in fertilizer production is covered by the exemption under Notification No. 81/75. The duty demand and penalties were set aside, and the appeals were allowed.