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of <h1>Tribunal remands case for LSHS verification in ammonia production under Notification 147/74.</h1> The Tribunal remanded the case to the Assistant Collector for verification of LSHS utilization in ammonia and subsequent fertilizer production. If the ... Exemption to goods if intended for specified use in the manufacture of other specified excisable goods Issues:Appeal against order of Collector of Central Excise (Appeals) regarding concessional assessment under Notification No. 147/74 for the manufacture of fertilizer.Detailed Analysis:The appeal was filed by the Collector of Central Excise, Patna against the order of the Collector of Central Excise (Appeals), Calcutta. The respondents obtained LSHS at a concessional assessment under Notification No. 147/74 for the purpose of manufacturing fertilizer. The Collector (Appeals) set aside the demand raised against the respondents, stating that the ammonia manufactured by the respondents was utilized for fertilizer production, fulfilling the requirements of the notification. The notification exempts certain products from duty if used as feedstock in fertilizer manufacturing, subject to specific conditions, including following Chapter X Procedure. The Department argued that since only ammonia was produced and not fertilizer, the benefit of the notification should not apply. The Respondent Company's manager admitted that no verification was done regarding the actual use of ammonia in fertilizer production.The Tribunal observed that the notification does not specify that the LSHS must be used in the same factory for fertilizer production, only that it should be intended for such use and actually utilized for it. The notification requires proof of utilization for fertilizer manufacturing to avail the concessional benefit. In this case, ammonia was produced in one unit and transferred for fertilizer production in another unit. While Chapter X Procedure was followed for the movement of LSHS and ammonia, there was no verification that the ammonia was indeed used for fertilizer manufacturing. The Tribunal found the Collector (Appeals) erred in granting the concessional benefit without verifying the actual utilization of LSHS for fertilizer production, as required by the notification. Thus, the Tribunal remanded the case to the Assistant Collector for verification of LSHS utilization in ammonia and subsequent fertilizer production. Upon satisfaction of the Assistant Collector, the condition for concessional assessment under Notification No. 147/74 would be considered fulfilled, and the appeal was allowed by remand for further verification.
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