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TMI Blog2003 (12) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... on under Notification No. 1/95-C.E. was available to HSD oil and furnace oil used by the assessee (100% EOU) in their aquaculture farms after the issuance of Notification No. 10/95-C.E., dated 23-2-95 which exempted from duty various excisable goods brought into aquaculture farms of 100% EOUs. This Tribunal held that the assessee had the right to choose that Notification which extended the benefit to him. Again, this decision does not appear to be relevant to the facts of the present case in which the party has claimed only under one notification viz. 1/95-C.E. for the relevant period. We have not heard anybody say that 'consumable' could be so construed as to exclude fuels like furnace oil used in boilers. In the cases of Mangalore Chemicals [ 1991 (8) TMI 83 - SUPREME COURT] and Fertilizers [ 1991 (8) TMI 83 - SUPREME COURT] and Novopan India [ 1994 (9) TMI 67 - SUPREME COURT] , it was held by the Court that, once an assessee was found to fall within the ambit of an Exemption Notification, full effect should be given to the exemption by a liberal interpretation of the terms of the notification. This ruling appears to have a say in the instant case. The appellants had, adm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was amended from time to time. Only two of the entries in the Annexure are relevant to the dispute in this case. These entries, at Serial Nos. 3 and 7 of the Annexure, for the period 4-1-95 to 14-9-98, are as under :- ANNEXURE-I 1. ................... 2. ................... 3. Captive power plants, including captive generating sets and their spares, fuel, lubricants and other consumables for such plants and generating sets as recommended by the said Board or the said Committee, as the case may be. 4. ................... 5. ................... 6. ................... 7. ................... 8. ................... 9. ................... 10. ................... 11. ................... Amending Notification No. 31/98-C.E., dated 15-9-98 substituted four separate entries viz. 3, 3A, 3B and 3C for the above entry No. 3. Accordingly, for the period from 15-9-98, the entries of Annexure-I relevant to the instant case are as under :- 3C. Furnace oil required for the boilers used in the textile units as approved by the Commissioner of Customs on the recommendation of the Development Commissioner. 4. ................... 5. ................... 6. ................... 7. Consumables The next relev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of Instant Tea Powder and submitted that furnace oil used as fuel in boilers for generating steam for the manufacture of the tea powder was squarely covered by the entry 'consumables' in Annexure-I to the Notification; that the entries in the said Annexure had to be liberally construed so as to give full effect to the EOU scheme; that, in answer to queries of the Central Excise Range Superintendent, the appellants had clarified through letter dated 12-8-94 that furnace oil was a consumable used in connection with the manufacture of Instant tea powder meant for export; that such clarification was accepted by the department; that this position was acknowledged in the impugned order itself; that the Commissioner erred in relying on the Amending Notification No. 31/98 to deny the benefit of the clear provisions of Notification No. 1/95; and that the applicability of the entry 'Consumables' to furnace oil was not affected by anything contained in any of the Amending Notifications. Without prejudice to the above submissions, Counsel also argued that the amendment of entry '3C' in Annexure-I to Notification 1/95-C.E., brought about by Notification No. 40/2000-C. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. In other words a conscious distinction between fuel and consumables has been made in Notification 1/95. Therefore extending the benefit of exemption for furnace oil as consumable under Notification 1/95 to M/s. Tata Tea Ltd., is ab-initio wrong. For the first time furnace oil used in boiler for textile unit was included in Notification No. 1/95 by an amendment Notification 31/98, dated 15-9-98. Later on 22-5-2000 the words used in textile units were deleted and for the first time furnace oil for all EOUs was exempted with effect from 22nd May, 2000 in view of the amending notification 40/2000. This notification does not have any retrospective effect. In this context it is observed that an amendment was carried out in the notification 1/95 on 15-9-98. After issue of Notification 40/2000, GOI issued Circular No. 49/2000 Cus., dated 22-5-2000 and para 23 of the circular reads as follows : Notification Nos. 133/94-Cus., dated 22-8-1994, 53/97-Cus., dated 3-8-97 and 1/95-C.E., dated 4-1-95 provide for duty free import/procurement of furnace oil for boiler in textile units only. The Ministry of Commerce has requested that the boiler is required for units other than textiles also. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 7 of Anexure-I thereto. It follows that for the relevant period (1-1-2000 to 21-5-2000), it was Entry No. 7 and not Entry No. 3C that was specific for the appellants' EOU. 5.3. The question, now, is whether the furnace oil used as fuel for the appellants' boilers could be considered as a consumable . This term has not been defined in the Notification nor under the Central Excise Act/Rules. According to the Concise Oxford Dictionary of Current English it means a commodity that is eventually used up . There is no dispute, in the instant case, of furnace oil having been used as a fuel for the boilers. The boilers generated steam and the latter was used in the drying stage of the process of manufacture of Instant Tea Powder. The furnace oil was, thus, consumed in the process. It fell in the category of consumables indisputably, and undisputedly too. Therefore, we hold that the furnace oil brought into the EOU and used in the boilers during 1-1-2000 to 21-5-2000 was exempt from payment of Central Excise duty in terms of Entry No. 7 of Annexure-I to Notification No. 1/95-C.E., dated 4-1-95. 6.1 We have also examined the case law cited. In the case of Kudremukh Iron Ore Co. Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , that interpretation which subserved the object and purpose of exemption should be accepted. But, in the instant case, we have not heard anybody say that 'consumable' could be so construed as to exclude fuels like furnace oil used in boilers. In the cases of Mangalore Chemicals and Fertilizers (supra) and Novopan India (supra), it was held by the Court that, once an assessee was found to fall within the ambit of an Exemption Notification, full effect should be given to the exemption by a liberal interpretation of the terms of the notification. This ruling appears to have a say in the instant case. The appellants had, admittedly, satisfied all the substantive conditions of Notification No. 1/95-C.E. to come within its purview. The only dispute was whether the furnace oil which was procured without payment of duty fell within the coverage of consumables under Entry No. 7. When construed in terms of the Apex Court's ruling, the entry would squarely cover the appellants,' furnace oil. We need not consider the learned Counsel's plea for giving retrospective effect to Notification No. 40/2000-C.E. 7. In the result, we set aside the impugned order to the extent it rel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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