Captive refinery manufacture stays dutiable where the input is a distinct excisable product and no specific exemption applies.

Raw petroleum coke manufactured within a refinery and used captively for calcined petroleum coke remained dutiable because it was a distinct excisable commodity, and the refinery declaration under Rule 140(2) did not create an exemption from duty. Rule 143-A was treated only as an enabling provision for operations in a declared refinery, while Rules 9 and 49 required duty on excisable goods that came into existence even for captive use. Notification No. 95/79-C.E. was unavailable because it depended on prior duty payment on the input and compliance with Rule 56A, which were absent; Notification No. 74/63 did not apply since the input was not used as fuel. The demand was upheld, subject to recomputation of the correct assessable value.

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Issues: Whether raw petroleum coke manufactured within the refinery and used captively for producing calcined petroleum coke was liable to excise duty; whether the refinery rules and the declaration of the premises as a refinery created an exemption from duty; and whether Notification No. 95/79-C.E. could be invoked without compliance with Rule 56A.

Analysis: The relevant refinery declaration under Rule 140(2) applied only to the licensed refinery premises and did not dispense with licensing requirements for raw petroleum coke, which was a distinct excisable commodity falling under item 11A(5) of the tariff during the material period. Rule 143-A was treated as an enabling provision permitting operations in a declared refinery, not as an exemption from duty on a newly emerging excisable product. The conversion of raw petroleum coke into calcined petroleum coke involved manufacture within the meaning of Section 2(f) of the Central Excises and Salt Act, 1944, and Rules 9 and 49 required duty on excisable goods that came into existence even if used within the factory. The retrospective amendment by Section 51 of the Finance Act, 1982 reinforced that position. Notification No. 95/79-C.E. granted relief only where duty had already been paid on the input and Rule 56A procedure was followed; since the raw petroleum coke had not suffered duty, the exemption was unavailable. Notification No. 74/63 was held irrelevant because the raw petroleum coke was not used as fuel.

Conclusion: The captively consumed raw petroleum coke was dutiable, the claimed refinery-based exemption was unavailable, and the exemption under Notification No. 95/79-C.E. could not be claimed.

Final Conclusion: The demand of excise duty on raw petroleum coke was upheld and the appeal failed, with only a direction that the lower authorities consider the correct assessable value while giving effect to the order.

Ratio Decidendi: A distinct excisable commodity produced within a refinery and used for further manufacture remains chargeable to duty unless a specific exemption applies, and a procedural exemption tied to prior duty payment and prescribed input-credit formalities cannot be claimed where the input itself has not borne duty.

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