9911796707
TMI Blog2006 (4) TMI 361X X X X Extracts X X X X X X X X Extracts X X X X ..... 004 against the OIO No. 4/2003-04 dated 26-2-2004 passed by the Commissioner of Central Excise, Mangalore. 2. The appellants M/s. Mangalore Refinery & Petrochemicals Ltd. (MRPL) refine Crude Petroleum and obtain various petroleum products. Low Sulphur Heavy Stock (LSHS) is one of them. LSHS is used for the generation of steam and in turn the steam is used for generation of electricity. The electricity is captively consumed in the refinery. However, a small portion of the electricity generated is diverted to the residential colony of the appellant. The dispute is whether the LSHS utilized for generation of electricity diverted in the above manner would be entitled for exemption from duty vide Notification No. 67/95-C.E. dated 16-3-199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is being marketed. The specification of LSHS to be marketed is prescribed by ISI (IS 11489-85). (iv) The adjudicating authority erred in ignoring this important and vital aspect and held that the impugned product is excisable on the ground that the appellant had filed Classification Declarations claiming exemption vide Notification 67/95 dated 16-3-1995. There is no estoppel in law just because a classification was claimed and if it could be established legally, technically and commercially that the so called LSHS was not a marketable product and, therefore, the same could not be subjected to excise duty. (v) It is well settled that the onus of proving that any product is marketable and, therefore, excisable is on the department. The foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty is not sustainable and, therefore, extended period cannot be invoked. (x) In view of the above submissions, the imposition of penalty under Rule 173Q of the erstwhile Central Excise Rules, 1944 is not proper as there was no contumacious conduct on the appellant. The following case-laws were relied :- (a) Hindustan Steel's case - 1978 (2) E.L.T. (J159) (S.C.) (b) Synthetics & Chemicals Ltd. v. CCE, Kanpur - 1997 (89) E.L.T. 793 (T) (xi) As regards interest under Section 11AB, when the very levy of duty is challenged, there is no case for recovery of any interest. The learned Advocate took us through the various documents submitted before the lower authorities to buttress the appellants' contentions. 5. The learned SDR pointed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that case. The appellants have furnished detailed technical literature on the refining of petroleum crude. For deciding this case, it is not necessary to describe the entire process of refining. Suffice it to say that while processing Low Sulphur Crude, say Bombay High Crude, the Short Residue (SR) produced in the Vacuum Distillation Unit (VDU) is called as LSHS. This contains 0.7% by weight of Sulphur and the kinematic viscosity is around 18,000 Cst. @ 50°C. If the material is to be sold as LSHS, then the viscosity should be reduced to about 630 cst to 730 cst @ 50°C. In order to do that, a suitable quantity of Kerosene and HSD are to be added and the temperature of LSHS is to be reduced to less than 70°C for transportation as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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