1997 (1) TMI 271 - AT - Central Excise

Summary

Issues Involved:
The issues involved in this case are the non-execution of a B-8 bond and non-renewal of an L-6 license for the product "BENTOL" by the appellants, leading to a demand for payment of differential duty by the Central Excise authorities.

Summary:
The appellants, who are manufacturers of Styrene Butadiene Rubbers, obtained a bye-product known as "BENTOL" during the manufacturing process, which is a mixture of Benzene and Toluene. The Assistant Commissioner (A.C.) had initially permitted the use of "BENTOL" for cleaning purposes at a concessional rate of duty, subject to certain conditions. However, a show cause notice was later issued by the Superintendent Central Excise, Bareilly, demanding payment of differential duty due to the non-execution of a B-8 bond and non-renewal of the L-6 license for "BENTOL" from 1970 onwards.

The appellants contended that as they were using "BENTOL" within their own plant for cleaning purposes, they were entitled to the benefit of a notification subject to following the prescribed procedure. They argued that since it was a case of captive consumption, the Chapter X procedure did not apply, and therefore, no fresh bond was required to be executed. The appellants maintained that all necessary permissions were obtained, and the demand issued by the show cause notice was time-barred.

Upon considering the submissions, the Tribunal found merit in the appellants' contentions. The Tribunal noted that the A.C.'s permission to use "BENTOL" for cleaning purposes was granted, and a copy of the order and the L-6 license were produced by the appellants. However, there was a contradiction in the A.C.'s order as it allowed the use of "BENTOL" in the plant while also requiring compliance with Chapter X procedure.

The Tribunal clarified that Chapter X of the Central Excise Rules pertains to the remission of duty on goods used for special industrial purposes and highlighted the requirement of a license under Rule 192 for obtaining remission of duty. In cases of captive consumption where goods are utilized within the same factory, the need for a bond is eliminated. The Tribunal emphasized that the appellants, having declared all facts to the authorities and obtained necessary permissions, were entitled to the benefit of the notification.

Ultimately, the Tribunal set aside the impugned orders, ruling in favor of the appellants due to the absence of a case on merit and granted consequential relief if any due to the appellants.