TaxTMI 
TaxTMI 
2009 (3) TMI 350
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....monia (CHSH 2814.90 of CETA. 1985) which is captively consumed in the manufacture of fertilizers for which the respondents avail exemption from payment of Central Excise duty under Notification No. 4/97-CE, dated 1-3-1997 (Sr.No. 25) (ii) import of ammonia and (iii) procure ammonia under bond under erstwhile Chapter X Procedure. 4. The respondents are charged with the allegation of contravention of the provisions of Rule 9(1) read with Rule 49 of Central Excise Rules, 1944. The charges are based on the allegations that the respondents had wrongly availed exemption under C.B.E. & C. Board Circular No. 246/80/96-CX, dated 1-10-1996. It was stated that ammonia gas, which is stored in the storage tank, is either manufactured within the facto....
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....storage tanks are not eligible to the benefit of exemption under the aforesaid circular of the Board. For this, the Revenue has relied upon the Hon'ble Supreme Court judgment in the case of Collector of Central Excise, Hyderabad v. Vazir Sultan Tobacco Co. Ltd. reported in 1996 (83) E.L.T. 3 (S.C.) in which it was held that the taxable event for Central Excise is the manufacture or production of the goods and not the removal of the goods. 9. For better appreciation, we reproduce below the Board's Circular dated 1-10-1996: "I am directed to refer to erstwhile Notification No. 75/94-C.E., dated 1-3-1994. Gases falling under Chapter 27, 28 or 29 produced in a factory and allowed to escape in the atmosphere by flare system or otherwise were e....
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....Circular, it is clear that in order to avail the above exemption, it is essential that the gases should be (i) produced in the factory (ii) it should be allowed to escape into atmosphere. Both these are applicable in the respondents' case. The integrated plant storage is also a part of manufacturing process and that too, in the case of hazardous gas, like ammonia requiring continuous monitoring of storage condition at - 33deg.C. In the absence of the above, there will be natural loss causing potential hazards in the surrounding area. The said circular is binding on the Revenue and has the force of law. In fact, the Notifications have been rationalized and reviewed to avoid any need of prescribing separate exemption/notification for the p....