1987 (10) TMI 199

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....otification No. 147/74, dated 30-10-1974 for the purpose of use of the same as feedstock in the manufacture of fertilizer. The respondents manufactured ammonia utilising the feedstock and transferred this ammonia to another factory where, it is stated, ammonia was utilised for the manufacture of fertilizer. The movement of the LSHS to the respondents' factory was under Chapter X Procedure. The Collector (Appeals) held that inasmuch as the ammonia had been utilised for the manufacture of fertilizer, the requirement of Notification No. 147/74 can be taken to have been fulfilled and set aside the demand raised against the respondents by the lower authority for the reason that the respondents had not manufactured fertilizer in their factory out....

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.... nobody's case that ammonia itself is a fertilizer and known so in the market. She, however, conceded that the ammonia produced was removed under Chapter X Procedure to another unit where fertilizer was manufactured. She pleaded that even if said ammonia produced out of LSHS obtained at concessional rate of duty was utilised for the manufacture of fertilizer, the necessary verification in this regard was required to be done before the concession could be extended in respect of LSHS even if it was held that the same when utilised for the manufacture of ammonia ultimately consumed in the manufacture of fertilizer, was eligible for the benefit of Notification No. 147/74. She pleaded that inasmuch as the Collector (Appeals) had allowed concessi....

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....nal rate and is stated to have been utilised in the manufacture of fertilizers in the other unit. In the absence of any restriction in the notification that LSHS obtained should be utilised in the same unit for the manufacture of fertilizer, the benefit of concessional assessment has to be allowed so long as it can be shown that the same has been utilised for the manufacture of fertilizer subject to the other provisions of the notification after observing the Procedure prescribed in this regard under the Notification. It is not disputed that Chapter X Procedure had been followed in respect of the movement of LSHS as also of ammonia. However, it has not been shown and proved to the Assistant Collector that the said ammonia ultimately was uti....