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TMI Blog2008 (5) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... 2713.30 of the said Schedule) which is captively used for generating steam which, in turn, is captively used in certain stage of fractional distillation of crude petroleum. Thus Fuel Oil is captively consumed in the manufacture of other petroleum products. One of such other petroleum products is Raw Naphtha which, when supplied to ferliliser manufacturers, attracts NIL rate of duty. During the period April, 2000-March, 2002, a portion of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 63-67/2005 dated 7-1-2005 in the respondent's own case [2005 (187) E.L.T. 34], held as under "Following the decision in IOCL's case, we hold that no duty was leviable on any quantity of Fuel Oil/FSHS used for generating steam required for the refining of crude petroleum (yielding petroleum products) in the appellants' refinery during the period of dispute, as we have found that such use of Fuel Oil/FSHS was covered by the expression "conduct 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on the 28th day of February, 2002, shall, to the extent it is relevant and consistent with these with the rules, be deemed to be valid and is sued under the corresponding provisions of these rules. The appellants' cases specifically covered by Rule 143A and notification No. 218/84. Demand of duty on the HSD in question would also cause repeat payment of duty inasmuch as the USD used for flushing out comes back to the refinery for processing and clearance 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0. It was argued that the respondents' refinery was not only a factory of production but also a deemed warehouse and, therefore, clearance of Fuel Oil produced in the refinery for captive consumption would amount to removal from factory to warehouse and, consequently, duty of excise was not required to be paid on such captive clearance from 1-7-2001 by virtue of Notification No. 47/2001-C.E. (N.T.) ibid. Alternatively, it was contended by the learned counsel 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 R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rules, be deemed to be valid and issued under the corresponding provisions of these rules." The Central Excise (No. 2) Rules, 2001 were superseded by the Central Excise Rules, 2002 on 1-3-2002. Rule 20 (warehousing provisions) of these new Rules is pari materia with Rule 2 of the 2001 Rules. Similarly, Rule 33 (transitional provisions) of the 2002 Rules is pari materia with Rule 32 of the, 2001 Rules. As the period of dispute relevant to the issue on hand is 1-7-2001 to 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 argumen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ehouse' and that the clearance of Fuel Oil for captive use in the manufacture of other petroleum products in the refinery would be covered by the phrase, "removal of any excisable goods from the factory of production to a warehouse" vide Rule 20. We are unable to accept this argument also for two reasons viz. (a) in the absence of specific saving clause, the Government's order cannot be considered to have survived the parent rule (Rule 140 of the old Central Excise Rules, 1944) which was 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 al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is to inquire into is whether the Act is incompatible with the repealed Act and whether it manifested any contrary intentions to the repealed Act. Unless a different intention has been manifested in the Act, the Repealed Act would continue to be operative. Even in a case of bare repeal accompanied by a fresh legislation the same subject, the provisions of the new Act will have to be looked into to find where and how far the new Act envisages a contrary intention affecting the 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, notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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