ORDER
Jyoti Balasundaram, Member (J)
1. The issue for determination in this appeal filed by the Revenue is the eligibilty to Anhydrous Ammonia brought into the respondent’s factory under Chapter X Procedure for intended use of manufacture of fertilizer to the benefit of exemption from duty under Notifications 145/71 and 40/85. The respondents were captively consuming anhydrous ammonia for manufacture of (1) di-ammonium phosphate; (2) ammonium sulphate; and (3) urea. Besides selling the above three products for use as fertilizer for agricultural purposes, the respondents were also selling them for use as chemicals. Three show cause notices were issued demanding duty in respect of such anhydrous ammonia cleared without payment of duty for the manufacture of above-mentioned three products, which were sold for industrial use as chemicals. The adjudicating authority confirmed the demands holding that since respondents had sold the products for industrial use as chemicals and the same were not bought or sold as fertilizer, they could not be classified as fertilizer. The lower appellate authority set aside the order of the Assistant Collector holding that the subject goods qualified for classification under T.I. 14HH of the Schedule to the erstwhile Central Excise Tariff and under Chapter 31 of the Schedule to the Central Excise Tariff Act, 1985 as fertilizer. Hence, this appeal by the Revenue.
2. We have heard Shri A.K. Madan, ld. S.D.R. and Shri Willingdon Christian, ld. Advocate. We find that the issue of eligibility to the benefit of Notification 75/84 had come up before the Hon’ble Supreme Court with reference to the same assessees, as seen from [1997 (91) E.L.T. 3 (S.C.)]. The Apex Court has held that the assessees were using raw naphtha in the manufacture of ammonia and captively using the ammonia for molten urea which, in turn, was used for manufacture of melamine which was not a fertilizer; molten urea was classifiable as a chemical fertilizer and since molten urea had emerged as a result of captive consumption of ammonia, the end use condition of Notification 75/84 was satisfied and the assessees were eligible for the benefit of the notification. The Hon’ble Supreme Court held that the benefit could not be denied by bringing in supposed intention of the Government and reading ‘soil fertilizer’ in place of ‘fertilizer’ used in the notification and that the fact of further use of molten urea in the manufacture of melamine in a continuous process also did not detract from the fact that fertilizer had emerged out of the process of manufacture.
3. In the present case, anhydrous ammonia procured by the respondents is first utilised in the manufacture of ammonia and ammonia, in turn, is captively consumed in the manufacture of di-ammonium phosphate, ammonium sulphate and urea which are admittedly fertilizers. The fact that the respondents sold these three products for further use by their customers, either as fertilizers or as chemicals cannot be used against the respondents so as to deny them the benefit of the notification, since the condition of the notification is satisfied by them. Following the ratio of the judgment of the Hon’ble Supreme Court cited supra, on the interpretation of similar notification, we see no infirmity in the order passed by the lower appellate authority, uphold the same and reject the appeal.