Captive fuel oil used in refinery steam generation was outside excise demand for the pre-1-7-2001 period.

Fuel oil captively used to generate steam for refining crude petroleum was treated as covered by the special refinery scheme under Rule 143A of the Central Excise Rules, 1944. For the period before 1-7-2001, that settled position, already affirmed in the assessee's own case and upheld by the Supreme Court, meant the excise duty demand on such captive fuel oil use could not be sustained. The matter was therefore resolved in favour of the assessee and against the Revenue for that earlier period.

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Issues: Whether duty of excise was leviable on fuel oil captively used for generating steam required for refining crude petroleum during the period prior to 1-7-2001.

Analysis: The earlier decision in the assessee's own case, later upheld by the Supreme Court, had held that fuel oil used for generating steam required for refining crude petroleum was covered by the special refinery scheme under Rule 143A of the Central Excise Rules, 1944. The present dispute, for the earlier period, was therefore governed by that settled position and the demand of duty could not be sustained on the fuel oil so used in the refinery process.

Conclusion: The issue was decided in favour of the assessee and against the Revenue for the period prior to 1-7-2001.

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