9911796707
TMI Blog2007 (8) TMI 191X X X X Extracts X X X X X X X X Extracts X X X X ..... 9,40,485/- in terms of show cause notice dated 28-8-2003 and another amount of Rs. 16,9617- in terms of show cause notice dated 10-6-2004. There is also equivalent penalty under Section 11AC of the Central Excise Act and confirmation of interest under Section 11AB of Central Excise Act. 2. The appellants are manufacturers of petroleum products falling under Chapter 27, 28 and 29 specified in the Schedule to Central Excise Tariff Act, 1985. Naphtha is one of the products manufactured in their premises. They are utilizing Naphtha falling under Chapter sub-heading No. 2710.14 as fuel in cogeneration power plant (CPP) and Hydrogen unit of Diesel Hydro Desulphurisation Plant by availing benefit of the Notification No. 67/95-CE., dated 16-3- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but not consumed at a particular point of time flows into the grid which is received back when power generated in their CPP is less than the power consumed in their refinery. It was also submitted that the quantity flown into the grind is normal wastage inherent in the activity of power generation. Since the waste cannot be let into the atmosphere, the same is allowed to flow into the grid and therefore, there was no removal for the purpose of levy of duty in tents of Section 3 of the Central Excise Act. It was also contended that no payment is envisaged in the power flowing into the grid beyond their control and there was no sale to APSEB and hence, no liability arises. 3. The Commissioner has not referred to any of these issues placed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the grid of APSEB as a technological necessity, depending upon the load generated and grid conditions. This uploading happens without the appellant's intervention. Therefore, there was no intention of sale of electricity and no valuable consideration is received and hence, no duty is required to be paid. He also submits that demands are barred by time. 5. The learned JDR reiterates the department's view. 6. We have carefully considered the submissions and have perused the grounds of appeal as well as the submissions made. As can be seen from the assertion of the assessee 99.9% of the electricity so generated is utilized in their refinery operations. The minuscule portion of the electricity gets automatically uploaded to the gri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4-1986 relating to captive consumption and the provisions of modvat claim are required to be construed harmoniously. In the assessee's own case, the use of Naphtha for production of intermediate products steam and electricity which are further used in the manufacture of final products were held to be eligible for the benefit of the Notification No. 217/86-C.E., dated 2-4-1986. We are of the considered opinion that appellants have not removed the electricity with an intention to sell but a minuscule amount of electricity so generated gets automatically uploaded to the grid of the APSEB as a technological necessity, depending upon the load generated and grid conditions. Therefore, in such a circumstance, Section 3 of the C.E. Act is not attra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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