ORDER
S.S. Sekhon, Member (T)
1. The appellants are a 100% Export Oriented Unit (EOU) licensee, since 1993, for manufacture and export of Refined Castor Oil, Hyderogenated Caster Oil, Hydroxy Stearic Acid and Ricinoletic Acid, etc. They had availed the benefit of Central Excise Notification No. 1/95-CE dated 04/01/95 and procured the fuel namely “Furnace Oil” without payment of duty under CT-3 certificates issued, after due compliance of the conditions of the notification.
2. It was noticed that vide amendment dated 15/09/98, Notification No. 1/95-CE was amended and the benefit of duty free clearance availed in respect of furnace oil processed by this 100% EOU unit was questioned. By issue of a show cause notice demanding duty on furnace oil so procured brought and used by the 100% EOU unit during the period 01/03/2000 to 04/07/2000, this duty was proposed to be recovered from the appellants and not the manufacture of furnace oil.
3. The Commissioner (Appeals), against an appeal filed on confirmation of the demands by the lower authority, found:
“The Annexure to the Notification 1/95 in para 3 distinguishable spares, fuels, lubricants from other consumables for captive power plants including generating sets. The use of separate words to cover fuel and consumable clearly indicates that the two are not inter changeable otherwise there would be no purpose in using two words when a single word would cover both the items. Notification viz., 1/95 which clearly distinguishes between fuel and consumable. Prima facie the meaning therefore is that the two are independent separate words, having different meanings. The same applies to the assessee’s plea to treat it as raw material. The process of manufacture as explained by he assessee does not indicate its use as a raw material/input in the manufacturing of Refined Castor Oil but only as a fuel used in the boiler to generate steam which is used in the distillation of the final product. Prima facie therefore neither the word consumable nor the word raw material appearing in para 5 and 7 to the notification would cover furnace oil used as a fuel. It is settled law that the scope of any notification, statute or Rule is not to be extended by inference or presumption but the meaning is to be derived from the common every day meaning of the language used, unless specific definition/meaning are assigned in the said notification, statute or rule. The meaning sought to be given to the words raw material and consumable so as to include in their ambit furnace oil used as fuel is not in consonance with the meaning as it emerges from the plain reading of Notification 1/95 which uses the word fuel as distinct from consumable and raw materials and there is no specific definition assigned either in this Notification or in the Central Excise Act or Rules under which the Notification is issued to arrive at the meaning as sought to be given to the term consumable/raw material by the appellant. The Notification 1/95 was amended by Notification 31/98 which replace the existing para 3 with the new para 3 plus para 3A, 3B and 3C as reproduced above. Para 3C gives exemption to furnace oil used as fuel in boilers in textile units only. The scope of the exemption for furnace oil used as fuel is confined only to use by textile units and none else and the appellant is admittedly not a textile unit. The issue has been further clarified by CBEC vide their letter 305/4/2000-FTT dated 11.02.2000 wherein the CBEC clarified that furnace oil required for use in boilers in units other than textile units will not qualify for the exemption under Notification 1/95 dated 04.01.95. It further clarifies that furnace oil used in boilers for generating steam where steam is essential for the manufacturing process in units other than textile units would not be eligible for the benefit under the category of “consumable” in view of the specific entry of the furnace oil used in the boiler in the Notification as explained above.” and, therefore, rejected the appeal. Hence the present appeal.
4. After hearing both sides and considering the material on record and the submissions made. The appellants are challenging an interpretation, that by the amendment dated 15/09/98 to Notification 1/95 the benefit of duty free utilization would be available under Serial No. 3(c) of the table to the notification only to furnace oil used for boilers in an 100% EOU of textiles would only be eligible and not to an EOU using furnace oil to generate steam used in and essentially required in the distillation of the oils in the appellants unit i.e. used as a consumable or and raw material permitted under Serial No. 5 & 7 of the same table. It is termed:
(a) The amendment dated 15/09/98 to the Notification vide Notification 31/98 added the following entries in the table to Notification 1/95.
“3. Captive power plants, including captive generating sets of a capacity exceeding 1000 KVA and the spares for such plants and sets as recommended by the said board.
3A. Captive power plants, including captive generating sets, upto a capacity of KVA and the spares for such plants and sets as recommended by the Development Commissioner.
3B. Fuel, lubricants and consumable for goods specified at item 3 and 3A as approved by the Commissioner of Customs on the recommendation of the Development Commissioner.
3C. Furnace oil required for the boilers used in the textile units as approved by the Commissioner of Customs on the recommendations of the Development Commissioner”.
(b) There is no doubt, that vide amendment at 3C above, furnace oil required for boilers used in the textile mills as approved by the Commissioner of Customs on the recommendations of the Development Commissioner, were goods eligible for the benefit of the exemption notification. However, this amendment did not impugned entry Nos. 5 or/and 7, in the said list captioned “raw material”, “consumable” against which the benefit was being availed, by the said appellants herein before the amendment came into effect vide Notification 31/98.
(c) There is no material on record which demonstrated that furnace oil was indeed not a consumable and/or not a raw material, permitted under entry Nos. 7 and/or 5 of the Notification 1/95 which remains the same before and after the amendment. The use of this furnace oil is to generate steam in the appellants’ factory, which is thereafter used in relation to the process of distillation of the final product. Without the use of this steam, process of distillation cannot be carried out, and end products can not be manufactured. Therefore, we cannot approve the Commissioner’s findings that the use of furnace oil in the boilers in this case to generate the steam. Prima facie would no constitute and be covered under the word “consumables” or “raw material”. The notification permits the goods mentioned, which are brought “in connection with the manufacture of an article” and there is no doubt there can be no dispute that the “furnace oil” in this case has been brought and used for the manufacture of final products, which have been exported by the EOU. Therefore, there is no doubt that the said goods would be covered by the word “raw material” and/or “consumable” in this case.
(d) In the case of Water Base Limited v. CC, Guntur {2001 (130) ELT 386 (Tri-Chennai)} had held that the if benefit was available under two or more notification, Revenue could not force to choose a particular notification on the assessee, which has been followed in the case of Rank Industries v. CCE, Guntur {2001 (44) RLT 298}. In this case, it is not a question of dealing with two notifications, eligibility, but it is in case of coverage under different Serial numbers entry, figuring in the list annexed under the same notification. The interpretation that on or after 15/09/98, the assessee was necessarily to prove the eligibility under entry No. 3C, and would not be eligible for duty free receipt of furnace oil under Serial No. 7 and/or 5 which it was eligible earlier, cannot be upheld, since there is no change in the status of the entry in Serial No. 7 and/or 5. Therefore, it is not material whether or not the eligibility Serial 3C was satisfied exemption eligibility remains unamended. The attempt of the lower authorities to deny the benefit by pointing out that Serial No. 3C is not applicable in this case, when the eligibility under Serial No. 7 and/or 5 was available at all times by force denying an eligible claim under entry No. 5 and/or 7. The plain reading of word appearing in the notifications must be made. The word “consumable” and figuring in the notification even after 15/09/98 would cover the use of furnace oil in a non EOU, not withstanding the amendment dated 15/09/98. When the plain words used in the notification are without an ambiguity cover the processed goods under exemption in this case, then there would be greater burden cost on the Revenue, to establish the case of denial of the benefit by disproving in a positive manner, the claim under Serial No. 7 and/or 5 rather than going by the circuitous route of pointing out that entry at Serial No. 3C is restricted in nature.
(e) The appellants have sought recourse to instructions issued by the board on 3/4/2003 wherein furnace oil was considered to be a consumable in contest of an EOU Notification and have claimed the same to be a binding on the department. The dispute herein is for a period, earlier to this clarification. However, “furnace oil” being not a consumable, is not the reason for which, benefit has been denied by the lower authorities. There appears no dispute on that aspect.
(f) There is force also in the argument being made that there is no allegation of furnace oil not having been received and/or used in the EOU and EOU notifications should be interpreted in a broad manner being beneficial notification, to achieve the intended object of export promotion as also in the argument that introduction of Serial No. 3C is made as an abundant caution or, to extend the benefit to “furnace oil” used in boilers where steam may not be used as an integrated essential process of manufacture of end products like in this case, but may be used for many other purposes, steam could be put to used in textile industry.
(g) The plea of demand could not be made on the appellants, since they had followed Chapter X procedure and have used the goods for the intended purpose and they are not the manufacturers of the furnace oil and reliance on the decision in the case of Arti Paints & Chemicals Industries (1984 (15) ELT 206 and Tamil Nadu Steels Ltd., v. CCE, Chennai (2001 (130) ELT 268 (Tri.Chennai) would induce us to hold that the present demands cannot be upheld.
5. In view of our findings the demands as confirmed, set aside and appeal is allowed.