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TMI Blog2002 (9) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... various petroleum products. They produced R.C.O./LSHS, which are residual fuel oils, and used by them captively in the generation of electricity, which electricity in turn was used in the refinery for refining crude petroleum. The appellants claimed exemption for RCO/LSHS, which had been captively consumed based on exemption notifications issued from time to time (Notification No. 352/77, dated 16-12-77, No. 75/84, No. 67/95 and No. 8/96, etc.). However, impugned orders held that the exemption was not available on the ground that the exemption is available only to RCO/LSHS directly used in the oil refinery and not to RCO/LSHS used in the manufacture of electricity which is not liable to Central Excise duty, the fact that electricity produce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned Counsel elaborated that in the Jaypee Rewa Cement case, the Apex Court was dealing with the question of eligibility of explosives used in mining and held that the explosives used in the mining of limestone which go into the production of cement was also used in the manufacture of cement. Learned Counsel also referred to the decision of the Larger Bench of this Tribunal in the case of Ballarpur Industries Ltd. [2000 (116) E.L.T. 312 (Tri.-LB)], on the question of Modvat credit on fuel oils such as LSHS captively consumed in the generation of electricity and held that indirect use of inputs such as use in electricity generation is also specified use. The learned Counsel also pointed out that this position has been accepted in the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... product is incidental in the process and manufacture of petroleum products falling under T.I. Nos. 6 to 11AA the exemption contained in the Notification No. 352/77-C.E., dt. 16-2-77 as amended by Notification No. 131/80-C.E., dt. 23-8-80 and 41/82-C.E., dt. 28-2-82 would be available to the quantity of intermediate product electricity. The exemption contained in this notification will, however, not be available to that quantity of petroleum products which is used in the generation of electricity which, in turn, is not used in the process and manufacture of petroleum products." (Board's letter F. No. 89/13/82-CX-3, dt. 6-7-83) 6. The crux of the dispute is whether indirect use of an exempted material would also satisfy the requirement o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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