1996 (7) TMI 307

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....sent appeal are : The appellants are engaged in the manufacture of cement falling under Chapter Heading 2502.02 of the Central Excise Tariff Act. The raw material required for manufacture of cement, namely, lime stone is obtained from the appellants' mines at Sindola, 8 to 9 km. from their cement factory. For extraction of lime stone from mines, the appellants use a mixture of Ammonium Nitrate and Fuel Oil (ANFO for short) as an explosive in the proportion of 94 : 6. ANFO falls under Chapter Heading 36.02. The materials are obtained by the appellants from the market and the mixing is done at the mines before they are used as explosives. Appellants also hold a licence under the Indian Explosives Act, 1884. 3. On 25-7-1988 appellan....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e within the classification of "Prepared Explosives" under Chapter Heading 3602.00; that Notification No. 167/86, dated 1-3-1986 provided complete exemption for products produced without the aid of power which included their product; that even otherwise their product was fully exempted from duty by virtue of Notification No. 281/86, dated 24-4-1986, since the mixture was prepared in the mines itself and not in any other place; that ANFO was not "goods" within the meaning of Section 2 inasmuch as it cannot be bought and sold in the market because of its very short shelf life; and that there is no suppression or clandestine operation on their part justifying the invoking of the extended time limit of five years or for levying penalty on them.....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....Notification No. 167/86, as amended by Notification No. 12/87, dated 23-1-1987 which came into effect from 10-2-1987 "Prepared Explosives" were not covered by general exemption Notification No. 167/86 after 1-3-1986. The adjudicating officer, therefore, held that ANFO was not entitled for any exemption under Notification No. 167/86 during the entire period referred to in the show cause notice. The Additional Collector, therefore, found that the process by which ANFO was produced by the appellants amounted to a process of manufacture. Relying again on the Tribunal's decision in the case of M/s. Singareni Collieries Co. Ltd. (supra), the Additional Collector found that even though ANFO is not marketed, it is a marketable commodity. Further, t....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ssions filed earlier. The Departmental Representative, Shri Sanjeev Sachdeva, opposing the appeal contended that the Additional Collector's order had discussed and disposed of all the contentions of the appellants, namely, the process of manufacture of the product, the nature of the product and it being excisable goods, applicability of exemption notification No. 167/86, the invoking of the extended period of limitation for issuing a show cause notice and the liability for penalty. On these counts, the impugned order had given clear findings which, according to him, were correct and sustainable. 6. We have carefully considered the submissions made and perused the records. 7. On the question whether mixing of Ammonium Nitrate....