ORDER
G.A. Brahma Deva, Member (J)
1. This appeal arises out of and is directed against the Order-in-appeal No. M-1276/BD-562/86 dated 28-8-1986 passed by the Collector of Central Excise (Appeals), Bombay.
2. The appellants M/s. Gujarat State Fertilizers Co. Ltd., are engaged in the manufacture of Anhydrous Ammonia which is used in the manufacture of fertilizers falling under Item No. 14HH of the Central Excise Tariff. They also removed the same for use in the manufacture of molten urea covered under Item No. 68 of the First Schedule of the Central Excises and Salt Act, 1944. The molten urea so manufactured is used by the appellants in the manufacture of melamine which is also subjected to duty of excise under T.I. 68. In respect of quantity of ammonia used during the period Oct., 1984 to Jan., 1985 in the manufacture of molten urea cleared to melamine plant, the appellants were asked to pay duty on ammonia removed without payment of duty. The contention of the appellants before the authorities below that ammonia which was removed to melamine plant to use in the manufacture of molten urea for the production of melamine was exempted under Notification No. 145/71-C.E. dated 26-7-1971, This contention was negatived by the lower authorities and confirmed the demand. Hence this appeal.
3. We have heard Sri A. S. Akilkar Ex. Superintendent (Excise & Customs), present employee of the appellant company, for the appellants and Sri. V. Chandrashekaran, learned S.D.R. for the respondent.
4. The point to be considered in the present appeal is whether ammonia which – was removed to melamine plant for use in the manufacture of molten urea for the production of melamine is eligible for exemption under Notification No. 145/71.
5. Sri V. Chandrashekaran appearing for the revenue submitted that this issue is already decided by the Tribunal in the very appellants’ case in Gujarat State Fertilizers Co. Ltd. v. Collector of Central Excise – [1990 (47) ELT 76 (Tri.)] and held that it was not eligible for exemption on similar facts and circumstances.
6. Shri A. S. Akilkar appearing for the appellants contended that ammonia used in the manufacture of molten urea is again generated at a subsequent stage which is being returned to ammonia storage. If the ammonia is used for the purpose other than fertilizers, it will again be charged to duty and therefore, there will be repetition of payment of duty on the same product. Further he said that though the said decision cited by the D.R. in the appellants’ case for the earlier period is in favour of the revenue, that can be distinguishable in view of the fact that Collector has taken different view for the different periods and further it was observed in the said decision that ‘to the extent that the regenerated ammonia sent back to the ‘Horten’s Sphere’ is used for the manufacture of fertilizers falling under Tariff Item 14HH, it will be eligible for the benefit of exemption under Notification No. 145/71-C.E., dated 26-7-1971.
6A. We have considered the rival submissions and perused the records. The Notification No. 145/71-C.E. dated 26-7-1971 exempts whole of duty of excise on ammonia if it is used in the manufacture of fertilizers falling under Tariff Item 14HH. We are fully convinced that the issue is covered by the earlier decision of the Tribunal in the appellants’ case cited Supra. The relevant finding portion in the said decision is reproduced as under :-
“We are unable to accept the argument of the learned Counsel for the appellant that the ammonia used in the manufacture of molten urea is again generated at a subsequent stage. The ammonia that is used in the manufacture of molten urea is consumed entirely in its manufacture and by virtue of splitting up of residual urea into its original constituents namely, ammonia and carbon dioxide, a re-generated product emerges albeit with the same name and chemical composition. The ammonia so obtained is not the original ammonia that was used in the manufacture of molten urea. The ammonia re-generated after decomposition of molten urea is a new product, attracting fresh excise duty.”
Following the ratio of that decision we hold that ammonia which was removed to melamine plant for use in the manufacture of molten urea for the production of melamine was not eligible for exemption under Notification No. 145/71-C.E.
As regards observation made by the Tribunal in the said decision about the regenerated ammonia sent back to ‘Horten’s Sphere’, used for manufacture of fertilizers falling under Tariff Item 14HH being eligible for exemption under Notification No. 145/71-C.E. dated 26-7-1971, it is not relevant to the issue, and we are of the opinion that, with or without such observation, the ammonia used in the manufacture of molten urea for the production of melamine was not eligible for exemption under Notification No. 145/71-C.E.
7. With the above observations we uphold the impugned order and accordingly the appeal is dismissed.