2009 (5) TMI 256 - AT - Central Excise

Tribunal remands case for review, orders refund pending decision. Focus on concessional rates, NGL usage.

The Tribunal set aside the Commissioner's order and remanded the case for fresh consideration, directing a review within four months. The appellant's ... Naptha (NGL) - benefit of concessional rate of duty – NGL used in the running of Gas Turbine Generator (GTG) which produces the steam as well as electricity – Naptha used to produce steam which was used in manufacture of fertilizer is entitled to concessional rate of duty under Notification No. 8/96-C.E., dated 23-7-1996 and Notification No. 75/84-C.E., dated 1-2-1984 – But demand relating to NGL used for electricity diverted for use by the colony is maintainable Issues:1. Applicability of concessional rate of duty on NGL used for manufacturing fertilizers.2. Dispute regarding the usage of NGL in the generation of electricity.3. Interpretation of relevant notifications and case laws.4. Decision on the appeal based on merits.5. Refund of deposits made by the appellant.Analysis:1. The appellant utilized NGL for manufacturing fertilizers, availing concessional rates under specific notifications. The original authority allowed the concessional rate for NGL used in the production of steam for fertilizer manufacture but disallowed it for the portion used in generating electricity for the plant and residential colony. This led to a demand of Rs. 1,10,85,954/- along with penalties, which was already decided by the Tribunal separately.2. The advocate for the appellant cited the Supreme Court's decision in IFFCO v. CCE, emphasizing that the demand related to raw NGL used for power generation cannot be sustained. The appellant argued that the same principle should apply in their case, especially considering that the Department allowed concessional rates for a subsequent period, except for electricity diverted to the residential colony.3. Considering the submissions and legal precedents, the Tribunal decided to set aside the Commissioner's order and remand the matter for fresh consideration. The Commissioner was instructed to review the case, taking into account the appellant's arguments, relevant judgments, and favorable decisions by the Commissioner (Appeals) within four months from the date of the Tribunal's order.4. The Tribunal directed the refund of deposits made by the appellant, pending the Commissioner's new decision, after adjusting any payable duty as per the fresh order. The appeal was allowed by remand under the specified terms, allowing for a reevaluation of the issues raised.This detailed analysis outlines the key aspects of the judgment, including the dispute over concessional rates, the usage of NGL in electricity generation, legal interpretations, the decision on the appeal's merits, and the refund process for the appellant.