TaxTMI 
TaxTMI 
2007 (4) TMI 4
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.... Central Excise Tariff Act, 1985. Basically, the assessee is a refinery. It uses Refinery Fuel Oil (RFO), being the residuary left after distillation of Bombay High Crude Oil as fuel for generation of high pressure steam which in turn is used for generation of electricity for their co-generation plant in which the high pressure steam moves a turbine which generates electricity. A part of that electricity is supplied to Tamil Nadu Electricity Board and the major portion of it is captively consumed. 3.In the present case, we are concerned with three products produced by the assessee in their refinery from the said RFO. The three products are naptha, sulphur and electricity. The assessee is a refinery. It is declared by the Central Governme....
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....ther the Department was entitled to invoke the extended period of limitation under Section 11A with show cause notice dated 22nd December, 1998. However, that question did not arise in the case of show cause notice dated 17th February, 1999 since the demand fell within the period of limitation. 4.Having heard learned counsel on both sides, we are in agreement with the view expressed by the Tribunal in its impugned judgment by which it has been held that naptha is a petroleum product and, therefore, the assessee which was a "deemed warehouse" was entitled to exemption in respect of RFO used for producing naptha during the above period. Therefore, to this extent, the assessee succeeds. To this extent, the show cause notice dated 22nd Decem....
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....us to the final product cleared from it. Generation of electricity, if captively consumed, is exempted from duty. This is because electricity which is generated in the refinery is used to operate the various processes within the refinery. In the refinery, there exists large number of processes. Each process generates an item and, therefore, every refinery is given the status of "deemed warehouse". However, a portion of the generated electricity, in the present case, is sold to Tamil Nadu Electricity Board. To that extent alone, the Department was right in demanding duty on RFO. 7.The question still remains as to whether the Department was right in invoking the extended period of limitation under Section 11A of the Central Excise Act. In ....
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....iod August 1998 to January 1999. To that extent alone, the assessee would be liable to payment of duty. This will require recalculation. Accordingly, to that extent alone, the matter is being remitted to the adjudicating authority for fresh determination of the duty amount payable by the assessee during the period August 1998 to January 1999. 9.We are also of the view that the penalty imposed on the assessee was unjustified since it has produced naptha and sulphur which are petroleum products. Similarly, the assessee has produced electricity from RFO, the major portion of which has been used for captive consumption and a minor portion is sold to Tamil Nadu Electricity Board. In the circumstances, we are of the view that the Department ha....