2001 (7) TMI 612 - AT - Central Excise

Summary

Issues: Application for waiver of pre-deposit of Central Excise duty amount confirmed by the Commissioner (Appeals) under the impugned Order. Interpretation of Notifications No. 57/94-C.E. and 1/95 regarding exemption of High Speed Diesel Oil and Furnace Oil as fuel for generation of electricity in a 100% E.O.U.

Analysis:

1. Application for Waiver of Pre-Deposit:
- The application was filed by M/s. Shamken Spinners Ltd. seeking a waiver of pre-deposit of Central Excise duty amounting to Rs. 71,64,792/- confirmed by the Commissioner (Appeals) under the impugned Order.
- The Applicant, represented by Shri R. Swaminathan, argued that they are a 100% E.O.U. approved by the Board of Approval and were availing High Speed Diesel Oil and Furnace Oil under Notifications No. 57/94-C.E. and 1/95 as fuel for generating electricity used in manufacturing cotton/synthetic yarn for export.
- The Additional Commissioner denied the benefit of the Notifications, which was upheld by the Commissioner (Appeals), stating that HSD Oil is not directly used in the manufacture of goods.
- The Applicant contended that they obtained the oil without duty payment based on CT-3 certificates and used it as fuel, with permissions extending the benefit of Notification No. 1/95 still being issued.
- Citing relevant case laws, the Applicant argued against the denial of benefits under the Notifications.

2. Interpretation of Notifications No. 57/94-C.E. and 1/95:
- Notification No. 1/95 exempts excisable goods when brought in connection with the manufacture and packing of articles into a 100% E.O.U., including Captive Power Plants, fuel, lubricants, and consumables recommended by the Board.
- Similarly, Notification No. 57/94 provides exemption to fuel, as claimed by the Applicant for utilizing oils obtained without duty payment for generating electricity used in manufacturing final products for export.
- The opposing argument emphasized that the electricity generated was used for other purposes as well, challenging the eligibility for the notification benefits.
- Upon considering both sides, the Tribunal found that the Applicant had a strong prima facie case for waiver of pre-deposit as the evidence presented supported the use of HSD and Furnace Oil as claimed, with no evidence to the contrary provided by the Respondent.
- Consequently, the Tribunal ordered the waiver of the entire duty amount and stayed the recovery during the appeal's pendency, scheduling a regular hearing for further proceedings.

This detailed analysis of the issues involved in the judgment of the Appellate Tribunal CEGAT, New Delhi, provides a comprehensive understanding of the application for waiver of pre-deposit and the interpretation of relevant notifications regarding the exemption of specific oils as fuel for electricity generation in a 100% E.O.U. manufacturing setup.