1989 (11) TMI 201 - AT - Central Excise

Summary

Issues:
- Interpretation of Notification No. 81/75C.E. regarding exemption of sulphuric acid for fertiliser manufacturing.
- Disallowance of exemption by Assistant Collector for indirect use of sulphuric acid.
- Maintainability of cross-objections filed by respondents.
- Justification of exemption based on the use of sulphuric acid in the manufacturing process.
- Comparison with previous Tribunal orders for similar cases.

Issue 1: Interpretation of Notification No. 81/75C.E.
The case involved the interpretation of Notification No. 81/75C.E., which exempted sulphuric acid used in the manufacture of fertiliser from central excise duty. The respondents claimed this exemption, stating that the sulphuric acid was used for demineralisation of water, essential for producing steam for urea fertiliser manufacturing.

Issue 2: Disallowance of Exemption
The Assistant Collector disallowed the exemption, arguing that the sulphuric acid was not directly used in fertiliser manufacturing. However, the Collector of Central Excise (Appeals) overturned this decision, citing a previous Order-in-Appeal and allowed the appeal. This led to the Revenue filing an appeal before the Tribunal.

Issue 3: Maintainability of Cross-objections
During the hearing, the appellant Collector argued against the maintainability of cross-objections filed by the respondents, stating they were time-barred and unnecessary since the impugned order was in favor of the respondents. The Tribunal dismissed the cross-objections based on these arguments.

Issue 4: Justification of Exemption
The appellant argued that the exemption required the Assistant Collector's satisfaction that sulphuric acid was used in fertiliser manufacturing, which was not the case here. In response, the respondents contended that sulphuric acid was essential for urea production, even if indirectly used. They referenced a previous Tribunal order supporting their position.

Issue 5: Comparison with Previous Tribunal Orders
The Tribunal compared the present case with a previous case involving the use of sulphuric acid in the manufacture of Sodium Hexa-Meta Phosphate (SHMP) for fertiliser production. The Tribunal had allowed the exemption in that case, similar to the current situation where sulphuric acid was used for demineralisation of water, crucial for urea fertiliser manufacturing. The Tribunal upheld the decision of the Collector (Appeals) and dismissed the Revenue's appeal, finding the exemption applicable based on the usage of sulphuric acid in the manufacturing process as established in the lower authorities' orders.