TaxTMI 
TaxTMI 
2014 (7) TMI 1117
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....December 1998 - September 2003 0 0 1,34,77,985 98,00,524 April 2002 - March 2004 57,65,031 46,15,664 0 0 October 2003 - September 2006 6,50,41,332 57,98,034 6,66,26,367 52,09,855 E/314/08 October 2006 - March 2007 2,76,39,210 12,85,463 1,29,30,673 6,20,606 E/1047/08 October 2007 - March 2008 1,84,92,358 12,10,782 1,74,79,336 11,19,130 E/1107/09 April 2008 - September 2008 1,78,72,658 19,26,155 2,46,98,724 28,81,172 E/665/11 October 2008 - September 2009 3,87,44,662 35,27,101 1,80,09,715 16,82,993 E/1067/11 October 2009 - August 2010 0 0 1,38,31,522 11,77,002 E/88815/13 April 2011 - December 2011 0 0 47,44,252 5,03,990 Total 17,35,55,251 1,83,63,199 17,17,98,574 2,29,95,272 Grand Total of A (A1 + A2) & B (B1 + B2) = 19,19,18,450 19,47,93,846 Total Duty Demand (A + B) = 38,67,12,296 Total Duty Demand on Exempted Goods (A1 + B1) = 34,53,53,825 Total Duty Demand on Administrative Building (A2 + B2) = 4,13,58,471 2.1 The appellant M/s. Bharat Petroleum Corporation Ltd. (....
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....rative/canteen building of the appellant. These notices were adjudicated and duty demands were confirmed along with interest thereon and also by imposing penalties. Aggrieved of the same, the appellant is before us. 3. The learned Counsel for the appellant makes the following submissions :- (i) BHGO is not a finished product but is an intermediate product, which is not marketable. BHGO which emerges as an intermediate product is used as fuel in the captive power plant. The Revenue has not produced any evidence to show that the BHGO is a marketable product. Hence, the demand of duty on BHGO is not sustainable. It is further argued that neither in the show cause notice nor in the impugned orders, BHGO has been classified in any specific chapter heading. In the absence of specific classification of the product, duty demands cannot be sustained. Reliance has been placed on the decision of this Tribunal, the Apex Court and High Courts in support of these contentions, the details of which are given below :- (i) CCE v. Gurdaspur Distillery - 2008 (224) E.L.T. 337 (S.C.) (ii) &nb....
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....g the period in question. There is no input exclusively used in the manufacture of SKO and Naphtha. There are a few common inputs which are used in the manufacture of dutiable final products and exempted goods namely, LPG, SKO and Naphtha, such as Actuma Ultra 40-Barrel, Mak Spiro EP 90-Barrel, Hydrol 15-Barrel, Hydrol 320-Barrel, Turbol EP 32-Barrel, Mak Turbol 46-Barrel, Acetylene, Argon Gas, Nitrogen, Combustion Promoter, CYL Hydrogen, Oxygen Gas, Anti-oxidant, Demulsifier, Di-Ethanol Amine, Hydrochloric Acid, Metal Passivator, Lubricity Additive, Caustic Soda, Ammonia Gas, etc. (iv) The appellants have not taken Cenvat credit attributable to the inputs used in the manufacture of the exempted goods, LPG, SKO and Naphtha and have taken credit only on that quantity of inputs used in the manufacture of dutiable final products. Up to 23-2-2006, the appellants did not avail any Cenvat credit of Central Excise duty paid on common inputs. On 23-2-2006, the appellants availed proportionate Cenvat credit on common inputs used from 2002-03 up to 23-2-2006. Post 23-2-2006, the appellants started the practice of initially availing the entire Cenvat credit of Excise duty paid ....
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....l in the case of Hindustan Petroleum Corporation Ltd. - 2013 (287) E.L.T. 102 (T) and Final Order No. A/956/2013/EB/C-II, dated 17-10-2013. (vi) Since the administrative building and canteen are located within the premises of the refinery, electricity used therein have to be treated as used in relation to manufacture of the petroleum products. The submissions made above would apply in respect of such use also. It is further submitted that if it is held that duty is payable on BHGO and naphtha used in the generation of electricity, which in turn has been used in the administrative building, canteen etc., the appellant would be eligible for credit of the duty. Reliance is placed on a number of decisions such as Steel Authority of India Ltd. - 1997 (90) E.L.T. 287 (S.C.), Bharat Heavy Electricals Ltd. - 1996 (102) STC 373 (SC) in support of the contention that if the products are held to be dutiable, the appellant should be given the benefit of the Cenvat credit of the duty so paid. It is also argued that the duty demands beyond the normal period of limitation would not be sustainable as the issue involved is one of interpretation of law and there is no suppression of f....
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....on with crude oil. From these documents, it is evident that BHGO is a manufactured product and is a marketable product. Therefore, the contention of the appellant that BHGO is not an excisable product is not sustainable. He also placed reliance on the decision of the Tribunal in the case of Andhra Pradesh State Electricity Board - 1994 (70) E.L.T. 3 (S.C.), wherein this Tribunal held that marketability is a question of fact to be decided in the facts of each case. The fact that the goods are not in fact marketed is of no relevance. So long as the goods are marketable, they are goods for the purpose of Section 3. It is not also necessary that the goods in question should be generally available in the market. Thus, if the goods are available from only one source or from a specified market, it makes no difference so long as they are available for purchaser. The marketability of an article does not depend upon the number of purchasers nor is the market confined to the territorial limit of any country. The ratio of the above decision applies squarely to the facts of the case and, therefore, there is no merit in the appellant's contention that BHGO is not marketable and hence not excisab....
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.... reversal. In the present case, the appellant had reversed the credit on inputs attributable to production of exempted final products on 23-2-2006 for the period from 2002-03 to 23-2-2006. Such reversal made after the clearance would amount to utilization of credit and, therefore, the benefit of Notification No. 67/95 would not be available in respect of naphtha and BHGO used in the manufacture of exempted final products. In the light of the above, it is submitted that the impugned demands are sustainable in law and accordingly, requires to be upheld. 5. We have carefully considered the submissions made by both sides. 5.1 As regards the demand of duty on BHGO and naphtha for the period prior to 1-7-2001, this Tribunal considered this question in the Chennai Petroleum case (cited supra) and it was held that no duty would be leviable on any quantity of fuel/oil/LSHS used for generating steam required for refining of crude petroleum in the appellant's refinery in view of the provisions of Rule 43(a) of the Central Excise Rules as the refinery was a bonded warehouse and the use of fuel/oil/LSHS without payment of duty was permitted for the conduct of further manufact....
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....ufacture of exempted final products subject to the appellant reversing the credit and the credit so reversed is certified by a Chartered Accountant/Cost Accountant and interest liability is discharged at the rate of 24% per annum for the period of delay in reversal. In the present case also, the benefit of this retrospective amendment ought to be given to the appellant, if these conditions are complied with. However, this is a matter of verification which has to be undertaken by the adjudicating authority and the appellant has to lead the necessary evidence that they have discharged the credit liability as provided for under the Finance Act, 2010 along with appropriate interest liability. Subject to submission of such evidence, the adjudicating authority has to consider the matter afresh and extend the benefit of Notification No. 67/95. 5.3 Thus, what is left out is only one area for consideration. The question is whether the duty liability will accrue in respect of BHGO and naphtha used in the manufacture of electricity, which in turn has been consumed in the administrative/canteen building etc. and which were not used in the manufacture of final products. This issue has b....