9911796707
TMI Blog2008 (5) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Raw Naphtha manufactured in the respondent's refinery was removed, with out payment of duty, to fertiliser manufacturers. The department issued show-cause notices to M/s. CPCL for recovery of a total amount of duty of Rs. 2,93,13,416/- for the above period on a total quantity of 23,311.980 MTs of Fuel Oil manufactured and captively consumed in their refinery, alleging that the benefit of exemption under Notification No. 67/95-CE dated 16-5-1995 (as amended) was not admissible to the said quantity of Fuel Oil which was allegedly consumed in the manufacture of Raw Naphtha which was removed, at NIL rate of duty, to fertiliser manufacturers. These show-cause notices also proposed penalty under Rule 173Q of the Central Excise Rules, 1944/Rule 25 of the Central Excise (No. 2) Rules, 2001/Rule 25 of the Central Excise Rules, 2002 for the alleged violation of law by M/s. CPCL. The noticee contested the proposals on numerous grounds. In adjudication of the dispute, the Assistant Commissioner of Central Excise confirmed the demand of duty against M/s. CPCL after finding that (a) the Fuel Oil manufactured in their refinery was an excisable product classifiable under SH 2713.30 as Residu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such further manufacturing processes" under Rule 143A. Naphtha is, admittedly, one of the petroleum products resulting from the refining of crude petroleum. No duty could be levied on the Fuel Oil used for generating steam required for the manufacture of this product." As noted under Ground No. 9 of the present appeal, the department filed Civil Appeals against the above order of this Bench, which were disposed of by the Apex Court by judgment dated 19-4-2007 [2007 (211) E.L.T. 193], wherein the above decision of this Bench was upheld. In the result, Ground Nos. 8 and 9 of the present appeal of the Revenue fail and consequently the order of the lower appellate authority setting aside the demand of duty on the respondents for the period prior to 1-7-2001 is sustainable. 3. The surviving issue to be considered is whether the respondents are entitled to the same benefit for the subsequent period (July, 2001 - March, 2002). This issue was debated thoroughly before us. Reiterating Ground No. 10 of the Revenue's appeal, the learned SDR submitted that, as Rule 143A (special provision for petroleum refineries) was omitted along with other Rules of the Central Excise Rules, 1944 wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce on payment of duty. So the provisions of Rule 143A and the notification No. 218/84 are relevant and Consistent with the new rules, as the new rules also do not contemplate repeated liability to duty. Considering the above provisions of Central Excise Rule 33 [sic] and also the decision of this Hon'ble Tribunal in the case of CCE, Cochin v. Cochin Refinery (supra) we find that the adjudication order is not sustainable and is liable to be struck down. The appeal is, therefore, allowed with consequential relief, if any." The counsel also relied on Order-in-Original No. 21/2005 dated 27-9-2005 passed by the Commissioner of Central Excise, Mumbai-II in the case of M/s. BPCL, wherein 'Refinery Gases' and 'Long Residues' resulting from the refining of petroleum were held to be not marketable and it was further held that, even if these products were assumed to be dutiable, M/s. BPCL were not required to pay duty on these intermediate products which were captively consumed within the refinery, as they had obtained permission of the Collect of Central Excise under the erstwhile Rule 143A of the Central Excise Rules, 1944. In this view, a demand of duty on M/s. BPCL for a period prior to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that exemption under Notification No. 67/95-C.E. was also available to Fuel Oil as an input used in or in relation to the manufacture of the exempted naphtha as, it was claimed, the naphtha was cleared after discharging the obligation prescribed under Rule 6 of the Cenvat Credit Rules, 2001. Learned counsel made further submissions to elaborate the point, but the same are not relevant to the present context where we are examining the arguments made on the main point i.e., whether the special scheme for petroleum refineries can be considered to be in force after the rescission of Rule 143A of the Central Excise Rules, 1944. 4. We have carefully considered the rival arguments on the issue. Under the erstwhile Central Excise Rules, 1944, the warehousing provisions were contained in Chapter VII (Rules 139 - 173) of those Rules. In the respondent's own case [2005 (187) E.L.T. 34], we examined these provisions and, having found that they had satisfied the requirements of Rule 143A, held that they had no liability to pay duty of excise on any quantity of Fuel Oil or LSHS used for generating steam required for the refining of crude petroleum in their refinery. We held that no duty could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31-3-2002, both the 2001 Rules and the 2002 Rules would arise for consideration in this case. 5. It was pointed out by the learned counsel that the Central Government had declared the respondent's manufacturing unit as a 'refinery' under Rule 140(2) of the erstwhile Central Excise Rules, 1944 as per order dated 3-6-1969 and consequently the unit was deemed to be a warehouse registered under Rule 140(1) with the result that the warehousing provisions of the Central Excise Rules, 1944 were applicable to the refinery. It was also argued that the above order of the Central Government should be deemed to be valid beyond 30-6-2001 by virtue of Rule 32 (transitional provisions) of the 2001 Rules. This argument appears to have been accepted by a co-ordinate Bench of this Tribunal in the respondent's own case [2005 (192) E.L.T. 973]. With great respect, we disagree for the reasons hereinafter stated. 6. According to Rule 32 of the 2001 Rules, circulars, instructions, standing orders, trade notices or other orders issued under the old Central Excise Rules (1944) by the Board, any Chief Commissioner or any Commissioner of Central Excise shall, to the extent they are relevant and consistent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rescinded on 30-6-2001; and (b) it appears from sub-rules (3) and (4) of Rule 20 that the factory of production and warehouse are separate premises. Sub-rule '(3) says that the responsibility for payment of duty on the goods removed from the factory of production to a warehouse shall be upon the 'consignee' while sub-rule (4) says that the responsibility for payment of duty on the goods despatched for warehousing but not received in the warehouse shall be upon the 'consignor'. It is evident from these provisions of Rule 20 that the "factory of production" and the "warehouse" mentioned under sub-rule (1) are separate premises and cannot be fictionally merged into one. For the same reason, we also reject the argument that Notification No. 47/2001-C.E. (N.T.) dated 26-6-2001 issued under Rule 20(1) of the 2001 Rules governed clearance of petroleum products manufactured in a refinery, for captive use within the refinery. The Notification only extended the facility of removal without payment of duty, to petroleum products from a refinery (factory of production) to a warehouse outside the refinery. Even this facility was withdrawn when the Notification was s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operation of Section 6 of the General Clauses Act." Provisions similar to those contained in Section 6 of the General Clauses Act, 1897 are available in Section 38A of the Central Excise Act, which reads as under :- "SECTION 38A Effect of amendments, etc., of rules, notifications or orders. Where any rule, notification or order made or issued under this Act or any notification or order issued under such rule, is amended, repealed, superseded or rescinded, then, unless a different intention appears, such amendment, repeal, supersession or rescinding shall not - (a) .. (b) . (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any rule, notification or order so amended, repealed, superseded or rescinded; or (d) .. (e) and any such " As an intention contrary to the one underlying the old Rules 140(2) and 143A appears from the 2001/2002 Rules, Section 38A ibid is not a saving provision for the appellants to claim the benefit of the above old rules beyond 30-6-2001. 10. It appears that the statutory scheme specially made for refineries under Chapter VII of the old Central Excise Rules (1944) came to an end with the rescissio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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