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TMI Blog2021 (11) TMI 656X X X X Extracts X X X X X X X X Extracts X X X X ..... CIAL) AND RAJU, MEMBER (TECHNICAL) Present For the Appellant : Shri Willingdon Christian, Advocate Present For the Respondent : Shri D. Kanjani, Superintendent (AR) ORDER This appeal has been filed by M/s Gujarat State Fertilizers Chemicals Ltd. against demand of Central Excise duty, interest and imposition of penalty. 2. Learned Counsel for the appellant pointed out that the issue involved is identical to the issue decided in the appellant s own case vide order no. A/10703/2020 dated 28/02/2021. He also submitted that in response to RTI query, Revenue has informed him that the said order of Tribunal dated 28/2/2021 has been accepted by the Revenue. In support of the same, he submitted a letter from CPRO, Vadodara F.No. IV/16-08/RTI/APP/2021-22 Date 12.08.2021. 3. Learned Authorised Representative for the appellant agrees that issue involved is identical. 4. We have examined the facts of this case. The facts are identical to the facts involved in the Appeal no. E/10576/2019 which was decided by the Final Order no. A/10703/2020 dated 28.02.2020. In the said order, following was observed: 5. We have considered the rival submissions. We find that the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) which provides that ammonia should be used in the manufacture of fertilisers. It is not in dispute that ammonia was captively consumed by the appellant in manufacturing molten urea. Therefore, the moot question is whether ammonia could be said to have been utilised for manufacturing any fertiliser. It is no doubt true that molten urea in its turn became an input for producing the final product, namely, melamine which admittedly was not a fertiliser. But as required by the express language of the notification we have to find out whether molten urea which was manufactured out of ammonia was a fertiliser or not. It is now well settled by a catena of decisions of this Court that for deciding whether an exemption notification gets attracted on the facts of a given case, the express language of the exemption notification has to be given its due effect. In this connection, we may refer to a decision of this Court to which our attention was invited by Shri Dave, learned Senior Counsel for the appellant. In M/s. Hemraj Gordhandas v. H.H. Dave, Assistant Collector of Central Excise Customs, Surat and Ors. [1978 (2) E.L.T. (J 350)], a Constitution Bench of this Court speaking through R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsumption, it is difficult to appreciate the contrary stand of the very same authority that it would cease to be a fertiliser for the purpose of exemption Notification No. 40 of 1985, even though ammonia results in the manufacture of the same excisable item, namely, molten urea. Such a stand cannot be permitted to be adopted by the department, as it would amount to blowing hot and cold at the same time. If molten urea is treated to be an excisable item under Heading 31.02 as a chemical fertiliser, it has to be treated on the same lines while construing the sweep of exemption Notification No. 40 of 1985 which expressly refers to Chapter 31 amongst others. In short, molten urea must be treated to be a fertiliser for the purpose of its exigibility to duty under Heading 31.02 of the Tariff Act and simultaneously also for the purpose of exemption Notification No. 40 of 1985. It is also easy to visualise that if molten urea would have been sold by the appellant in outside market instead of being captively consumed further for the manufacture of melamine, it would have borne full duty subject to exemption notification, if any, under Tariff Item 31.02. Only because it was captively consum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces, both the ingredients of the exemption Notifications have been met by the Respondent, namely, that it is using fuming sulphuric acid which is included in the expression sulphuric acid falling in T.I. 14G of the First Schedule to the Act and that this fuming sulphuric acid is intended for use in the manufacture and is in fact used in the manufacture of fertilizer that is Ammonium Sulphate. The impugned order seeks to distinguish this decision on the ground that Ammonium Sulphate produced by the appellant in this stream is only a bye product and Caprolactam is main product. It has been argued that appellant produce 5 ton of Ammonium Sulphate to produce just 1ton of Caprolactam therefore, it cannot be treated as bye-product. We find that sulphur used for production of Ammonium Sulphate alongwith Caprolactam is exempted as held by Hon ble Delhi High Court in the appellant s case reported at 2009 (241) ELT 190 (Del.). Relevant Para 30 of the decision is reproduced below:- 30 . The crucial terms here are sulphuric acid intended for use in the manufacture of fertilizers . There are no restrictive terms cutting down the width of the phrase intended for use . Applying the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Apex Court and Tribunal as referred to in Para 3.3 above. In the case of Indo Gulf Fertilizers Chemicals vs. CCE - 1999 (112) ELT 448 (Tri.) (supra), the issue has been examined and following has been observed:- 4 . We find that the issue is covered by the earlier decision of the Tribunal in appellants own case in appeal No. E/1357/95-C and the Tribunal vide Final Order No. 435/99-C, dated 19-5-1999 allowed the benefit of Notification 81/75-C.E. in respect of sulphuric acid used in the cooling tower in appellants unit. The Tribunal held as under : The contention of the appellants is that the sulphuric acid is used in the cooling tower for the control of acid alkaline ratio (pH value) of the water which was later on used in the ammonia plant. The contention of the appellants is that since this sulphuric acid was used in or in relation to the manufacture of fertilisers, therefore, they are eligible for the benefit of the notification. The Notification No. 81/75-C.E., dated 22-3-1975 exempts from excise duty the sulphuric acid intended for use in the manufacture of fertilisers. We find the issue is covered by the decision of the Tribunal in the case of Fertiliser Cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 from raw naptha. Raw Naptha is cracked in cracker containing number of burners and heated upto 800 degree centigrade. After the process of cracking, Ethylene and Propylene gases are produced in the factory. These gases are also captively consumed as a refrigerant for cooling since they have the property of reducing temperatures upto 100 degree c. and 30 degree c. respectively. 7 . 8 . It is the further case of the appellant that as per Exemption Notification No. 217/86-C.E., dated 2-4-1986, the inputs ethylene and propylene (falling under chapter 29) captively consumed in the manufacture of finished goods falling under chapter 29 are exempted from excise duty. As per the said notification such exemption will not be available to ethylene and propylene used in the manufacture of goods falling under chapter 27, namely methane and ethane. In other words, excise duty will have to be paid by the respondent assessee for such of the quantity of ethylene and propylene (inputs) captively consumed and used in the manufacture of products falling under chapter 27 namely methane and ethane. 9 to 29 .. 30 . We have heard the learned counsel for the parties at length and per ..... 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