1994 (8) TMI 137 - AT - Central Excise

Tribunal rejects appeal on LSHS exemption, upholding Collector decision.

The appeal was rejected by the Tribunal, upholding the Collector (Appeals)' decision that Low Sulphur Heavy Stock (LSHS) used for steam generation does ... Low Sulphur Heavy Stock Issues Involved:1. Eligibility of Low Sulphur Heavy Stock (LSHS) for exemption under Notification No. 75/84-C.E.2. Interpretation of the term 'Feed-stock' in the context of the exemption notification.3. Relevance of previous Tribunal and Supreme Court decisions.Detailed Analysis:1. Eligibility of Low Sulphur Heavy Stock (LSHS) for Exemption Under Notification No. 75/84-C.E.The main question was whether LSHS used for generating steam qualifies for exemption under Notification No. 75/84-C.E. The Collector (Appeals) held that LSHS used for steam generation does not qualify for the exemption, as it does not amount to use as 'feed-stock.' This decision was based on previous Tribunal orders, particularly Order Nos. 834 to 839/86-C dated 17-12-1986, which followed the principles established in Neyveli Lignite Corporation v. Collector of Central Excise, Madras. The Tribunal in these cases concluded that LSHS used for steam generation could not be treated as having been used as feed-stock in fertilizer manufacturing.2. Interpretation of the Term 'Feed-stock' in the Context of the Exemption NotificationThe term 'feed-stock' was central to the dispute. The Tribunal had previously interpreted 'feed-stock' as referring to raw materials delivered to a machine for processing. This interpretation was upheld in the Neyveli Lignite Corporation case and was the basis for rejecting the exemption claim for LSHS used for steam generation. The appellants argued that the term should be broadly interpreted to include materials used in the integrated process of manufacturing fertilizers, citing Supreme Court judgments in other contexts. However, the Tribunal maintained that the specific wording of the notification must be strictly followed, and 'feed-stock' should be understood in its technical sense as raw material directly used in the manufacturing process.3. Relevance of Previous Tribunal and Supreme Court DecisionsThe appellants cited several previous decisions, including those of the Supreme Court, to argue that materials used indirectly in manufacturing processes should be considered as 'raw materials' or 'feed-stock.' They referred to cases like Collector of Central Excise v. Ballarpur Industries Ltd. and Saurashtra Calcine Bauxite and Allied Industries v. State of Gujarat. However, the Tribunal found these citations irrelevant because they did not specifically address the interpretation of the term 'feed-stock' in the context of the exemption notification. The Tribunal emphasized that each notification must be interpreted strictly according to its language, without room for broader intendment.The Tribunal also addressed the appellants' contention that the matter should be referred to a larger Bench due to conflicting decisions in previous cases, such as Indian Oil Corporation, Barauni v. Collector of Central Excise, Patna. The Tribunal noted that the notifications in those cases were differently worded, making the findings inapplicable to the current case. Therefore, the Tribunal saw no need to refer the matter to a larger Bench.ConclusionThe appeal was rejected based on the Tribunal's consistent interpretation of the term 'feed-stock' and the specific wording of the exemption notification. The Tribunal upheld the Collector (Appeals)' decision that LSHS used for steam generation does not qualify for exemption under Notification No. 75/84-C.E.