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TMI Blog2002 (4) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... two appeals is whether in a refinery, the goods that come into existence in the process of blending, mixing, reprocessing and manufacturing, are required to pay duty in terms of their captive use or they are required to pay duty only when they are finally cleared for home-consumption. 3. The facts of the case briefly stated are that M/s. Indian Oil Corporation Ltd. manufactured Slack Wax, JBO(C), JBO(P), TOFS and used other items for the manufacture of furnace oil. In the other case, RCO and SKO were used for the manufacture of furnace oil. Furnace oil is cleared from the refinery premises without payment of duty in terms of Notification No. 75/84-C.E., 8/96-C.E., 4/97-C.E. and 5/98-C.E. for use in various fertilizer units. It was alleged by the Department that the appellants in the course of manufacture of the final product which is furnace oil manufactured the above-referred intermediate products and used the same in the manufacture of furnace oil which is the end-product in this case; that the intermediate products were liable to duty in terms of the Notification No. 65/95, dated 16-3-95. Accordingly, the demand of Rs. 1,82,63,249.00 was confirmed in respect of Appeal No. ER- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f non-marketable intermediaries, even marketable category of intermediaries, so long as they are not cleared outside the refinery premises, should not be charged to Central Excise duty, and that demands for duty raised, if any, in respect of past clearances of such intermediaries should be withdrawn." 6. Pursuant to the above clarifications, Central Excise Rules were amended. Rule 140(2) was introduced to authorise the Central Government to declare any premises as a refinery, which was clarified to be deemed as a warehouse. It was submitted that Rule 143A was introduced to authorise the owner of the goods to blend, to treat, or to make such alteration or to conduct such further manufacturing processes in the goods processed and manufactured in a refinery in such manner and subject to such condition as the Central Government may by notification in the official gazette, specify. The Counsel for the assessee submitted that thus, in addition to declaring the premises of M/s. IOC Ltd. as a refinery, they were declared as a warehouse and were permitted to undertake the processes stated above. It was contended further that certain modifications in the process set out were undertaken by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ides for clearance of goods for home-consumption. He submits that this Rule covers the removals from warehouse. It has been specifically provided that this removal shall be for home-consumption. He submits that the use of intermediate goods in the manufacture of final product or the end-product, is not removal for home-consumption. He, therefore, submits that since the use of intermediate products in the process of final product is not a removal for home-consumption, therefore, the duty on intermediate goods is not payable. It will become payable only when the intermediate products as such, are cleared for home-consumption. 8. In regard to the special provisions, learned Counsel for the appellants refers to the judgment of this Tribunal in the case of Hindustan Petroleum Corporation Ltd. v. Collector of Central Excise, Bombay reported in - 1985 (21) E.L.T. 490 and submitted that in paras 14 and 15, the implications have been clearly brought out. Learned Counsel for the appellants also submitted that this decision of the Tribunal has been finally approved by the Hon'ble Supreme Court as reported in 1989 (44) E.L.T. A127. Learned Counsel for the appellants also referred to the deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suitable material, waste and other refuse. Rule 150 provides that excisable goods may be lodged in Customs Bonded Warehouse under certain conditions. Rule 151 talks of offences with respect to warehousing. Rule 152 sets out the method of removal of goods from one warehouse to another. Rules 156 and 156A are also specific. Rule 156B provides for consequentials if the triplicate application is not presented. Rule 157 provides for clearance of goods for home consumption. This Rule 157 is important in the present context. This Rule specifically says that any owner of goods warehoused may, at any time, [within the period during which such goods can be left or are permitted to remain in a warehouse under Rule 145] clear the goods for home consumption by paying duty and other charges. Thus, we note that there is a self-contained code for dealing with goods stored in a warehouse in a refinery. We note that the appellants' unit is a refinery and is a deemed warehouse and therefore, the warehousing provisions in the Rules which are self-contained codes, shall prevail over any other provisions in the Rules. 10. The Counsels for the Revenue emphasised that whatever is produced, which is iden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the intermediate products for further manufacturing processes. The words 'manufacturing in a refinery' cannot be given a restricted interpretation suggesting that the blending, treating or other alterations should take place in the identical refinery. Though Lube Refinery and ESRC are two different legal entities and have been declared as two separate refineries in the absence of any words in Rule 143A holding that the further manufacturing processes should be carried out in the same refinery, the appellants must be given the benefit of Rule 143A. The object of this provision is to afford the benefit of the rule if any product is used in the integrated refining system. If the product is so used, the end product alone should be excisable. 15. We are also not inclined to agree that the term 'further manufacturing processes' should be given a restricted meaning. As pointed out in the earlier paragraph, the washing of filters in the Dewaxing Unit must be held to be towards the manufacture of the final product because the entire process carried out by the assessee in converting the raw material to a finished product should be taken into consideration. As the process of washing the fil ..... 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