ORDER
G.P. Agarwal, Member (J)
1. All the four captioned appeals are directed against the impugned orders passed by the Collector of Customs and Central Excise (Appeals), New Delhi.
2. Factual backdrop:
Appeal No. E/2227/87-C : M/s. National Fertilizers Limited, the respondent herein obtained licence in Form L-6, No. 1 on 2.2.1977 for bringing into their factory Furnace Oil under Item 10 of the Central Excise Tariff, at Nil rate of duty under the provisions of Notification No. 147/74-C.E., dated 30.10.1974 for using the same as Teed Stock” in the manufacture of Fertilizer as also at concessional rate of duty under Notification No. 195/76-C.E., dated 10.6.1976 for use otherwise than as “Feed Stock” in the manufacture of fertilizers. It was the case of the department that the respondent under their aforesaid L-6 licence brought into their premises 2532.569 Kilolitres of furnace oil during the period from 1.10.1977 to 31.12.1977 free of duty for use as “Feed Stock” in the manufacture of Urea Fertilizer. But out of the said quantity of furnace oil the appellants used 2287.651 Kilolitres of furnace oil during the period from 1.11.1977 to 31.1.1978 otherwise than as “Feed Stock” in the urea plant. Likewise it was the further case of the department that the respondent brought 1272.040 Kilolitres of furnace oil during the period from July, 1977 to December, 1977 at concessional rate of duty for using the same otherwise than as “Feed Stock” in the manufacture of fertilizer in terms of Notification No. 195/76-C.E., dated 10.6.1976 but out of this quantity they used 1146.832 Kilolitres of furnace oil for raising steam in the urea plant during trial runs and commissioning of the urea plant without any production of urea. As a follow up action a show cause notice calling upon them to explain as to why the amount of Rs. 3,88,46932 being Central Excise duty on the aforesaid quantity of furnace oil (i.e. to say 2287.651 plus 1146.832 Kilolitres) brought by them and not used in accordance with the manner laid down in Notification No. 147/74-C.E., dated 30.10.1974 and Notification No. 195/76-CJE., dated 10.6.1976 be not recovered from them was issued. After the usual adjudication proceedings the Assistant Collector vide his Adjudication Order-in-Original No. 18/AC/D/84/C.EX., dated 3.3.1984 confirmed the said demand. Being aggrieved the respondent filed their appeal before the Collector of Central Excise (Appeals), New Delhi, who vide his impugned order confirmed the demand of duty on 1146.832 Kilolitres of furnace oil but set aside the demand made on 2287.651 Kilolitres of furnace oil holding that the respondents were entitled to exemption under Notification No. 147/74. Hence the present appeal by the Department.
Appeal No. E/2228/87-C: The respondent herein submitted their claim for refund of duty amounting to Rs. 7,56,764.95 paid by them under protest during the period from 1.7.1983 to 31.10.1983 on ‘Furnace Oil’ obtained free of duty in terms of Notification No. 147/74-C.E., dated 30.10.1974 to the Assistant Collector, Central Excise, Chandigarh on the ground that “Feed Stock” used by them in their factory for the generation of steam was entitled to exemption from excise duty. However, the Assistant Collector rejected the claim vide his Order-in-Original No. 52/AC/Refund/84/C.Ex., dated 18.4.1984. Against this order of the Assistant Collector M/s. National Fertilizers Ltd. respondents herein filed their appeal before the Collector of Customs & Central Excise (Appeals), New Delhi, who vide his common Order-in-Appeal No. 142 to 143-CE/CHG/87 dated 313.1987 allowed the appeal. Hence the present appeal by the Department.
Appeal No. E/2229/87-C: The respondent submitted their refund claim amounting to Rs. 6,86,19939 paid by them under protest during the period from 1.7.1983 to 30.9.1983 on Heavy Petroleum stock obtained free of duty in terms of Notification No. 147/74-C.E., dated 30.10.1974 to the Assistant Collector on the ground that the “Feed Stock” used in their factory for the generation of steam was entitled to exemption from excise duty. However, the Assistant Collector rejected the same. Against this order of the Assistant Collector, the respondent filed their appeal before the Collector of Customs & Central Excise (Appeals), New Delhi, who vide his impugned common Order-in-Appeal No. 142 to 143-CE/CHG/87 dated 313.1987 allowed the appeal of the respondent with consequential relief. Hence the present appeal by the Department.
Appeal No. E/2230/87-C : The respondent submitted their claim for refund of duty of Rs. 1,01,368.22 (as amended) paid by them in the month of May, 1983 on the ground that no excise duty was payable on the materials lost in transit/missing wagons of LSHS/HPS/Furnace oil as the same had not reached the destination. However the Assistant Collector rejected the said claim of the appellant for refund. Against the said order of the Assistant Collector, the respondent filed their appeal before the Collector of Customs & Central Excise (Appeals), New Delhi, who vide his impugned Order-in-Appeal No. 156-CE/CHG/87 dated 313.1987 allowed the appeal in part holding that the respondents are entitled to duty exemption on the quantity of furnace oil/Heavy petroleum stock used in the generation of steam for manufacture of urea. Hence the present appeal by the department.
3. We have heard Shri L.C. Chakraborty, learned JDR for the appellants and Shri A.K.S. Bedi, Advocate for the respondents in all the appeals.
4. The only question involved in all these appeals is whether the use of furnace oil for generating the steam in the urea plant during trial runs and commissioning of the urea plant without production of any urea could be said to be used as “Feed Stock” within the meaning of Notification No. 147/74-C.E., dated 30.10.1974.
5. Shri L.C. Chakraborty, learned JDR for the appellant submitted that the said issue is covered in favour of the department inasmuch as in the case of Collector ofCentral Excise, Patna v. M/s. Fertilizers Corpn. of India Ltd. Order No. 834 to 839/86-C dated 17.12.1986 this Tribunal has held that the use of furnace oil/Low Sulphur Heavy Stock for generating the steam cannot be held to be used as “Feed Stock” in the manufacture of fertilizers within the meaning of Notification No. 147/74-C.E., dated 30.10.1974. In reply Shri A.K.S. Bedi, learned counsel for the respondents cited the case of Neyveli Lignite Corpn. Ltd. v. Collector of Central Excise, 1985 (19) ELT 617 and supported the impugned orders.
6. We have considered the submissions made by the parties and find that after noticing the case of Neyveli Lignite Corpn. Ltd., supra this Tribunal in the case of Collecor of Central Excise, Patna v. m/s. Fertilizers Corpn. of India Ltd., supra held on the lan-uage of Notification under reference, i.e. Notification No. 147/74-C.E., dated 30.10.1974 nd the case law on the point that furnace oil/Low Sulphur Heavy Stock used for genera-on of steam cannot be held to be used as “Feed Stock” in the manufacture of fertilizers, “hus following the ratio of the said decision we hold that the use of furnace oil for rais-ig steam in the urea plant during trial runs and commissioning of the urea plant without ny production of urea cannot be said to have been used as “Feed Stock” in the manufac-ire of fertilizers. Consequently the respondents were not entitled for the benefit of fotification No. 147/74-C.E., dated 30.10.1974.
7. In the result all the four appeals are allowed and the orders passed by the ollector of Customs & Central Excise (Appeals), New Delhi so far as they are before us are set aside and that of the Assistant Collector restored.