TaxTMI 
TaxTMI 
2018 (7) TMI 1783
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....r Rule 10 of CESTAT (Procedure) Rules, 1982? 3. Whether Hon'ble CESTAT is correct in remanding the case for fresh adjudication to decide on the exciability and dutiability of RFO used in generation of Electricity, when the issue has reached a finality with the decision of Apex Court in the same party's case for the previous period vide decision reported in [2007(211)ELT 93(SC)]." 2. Short facts leading to the appeal are that, M/s.Chennai Petroleum Corporation, Chennai, are engaged in the manufacture of 'Petroleum Products', falling under Chapter 27 of the Central Excise Tariff act, 1985 and they are availing Cenvat Credit of duty paid on the inputs/capital goods received by them, for the manufacture of the final products. M/s.Chennai Petroleum Corporation Ltd, Chennai, 1st respondent herein, generates power, captively out of Low Sulphur Heavy Stock (LSHS), otherwise known as, Residual Fuel Oil (RFO) and also out of Naptha. RFO was used as fuel in the Steam Turbine Generator (TG2) and Naphtha was used as fuel in Gas Turbine Generator (GTG). These are intermediate products, manufactured during refining crude and used in generation of electricity. Electrici....
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....S (RFO) cleared and used for generation of power sold to TNEB. 6. Vide Order-in-Original No.46/2001, dated 31.12.2001, both the demands totaling to Rs. 3,49,98,651/-, were confirmed by the Adjudicating Authority, with the following findings: "(a) Regarding marketability of LSHS (RFO):- The term LSHS or RFO are interchangeable terms to refer to vacuum residue left behind after refining crude petroleum. The fact that it is vacuum residue does not make it non-marketable nor does its high viscosity stop it from being used as fuel. It may be mixed with other oils to reduce its viscosity and does not require major manufacturing operation which does not result in emergence of new product or change in properties of the product. Hence, it cannot escape levy on the plea that it is not marketable. (b) Eligibility for exemption under Notification 5/99- they are neither licensee nor have obtained sanction order under the Electricity Act and hence, not eligible for exemption. (c) Benefit under Notification 67/95- the benefit under this notification is available only for captive consumption for production of final products which are dutiable. In the instant case, the....
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....r and deserves to be set aside. Moreover, the grounds and plea of the Department had not been considered by the Tribunal and hence, it is not a speaking order on this aspect of appeal, thus violating the principles of natural justice. (iii) CESTAT has observed that the adjudicating authority did not consider the crucial test of excisability by using the twin test prescribed by the Apex Court in the case of Board of Trustees Vs. CCE, AP [2007(216)ELT 513 (SC)]. In this regard, it is seen that the Adjudicating Authority while confirming the demand has discussed the marketability of LSHS (RFO) with the finding that LSHS/RFO are interchangeable terms to refer to vaccum residue that is left after refining the crude. Further, he had also detailed that the vaccum residue just because of its high viscosity does not make it as non-marketable since it can be mixed with other oils with minimal manufacturing operation to reduce the viscosity and further uses or sold commercially. (iv) Further, the dutiability of RFO used in production of steam which is in turn used in production of electricity which is partly supplied to TNEB is already a settled issue with the decision of Ho....
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....grounds of appeal, there is no discussion. Further, by relying on the decision of Punjab and Haryana High Court in the case of CCE Chandigarh Vs. Modern Alloys - 2010 (285) ELT 364 (P&H), tribunal dismissed the appeal, which cannot be approved in the light of the decision of the Hon'ble Supreme Court in Tata Engineering & Locomotive Co. Ltd., v. Collector of Central Excise, Pune reported in 2006 (203) ELT 360 (SC). 3. At this juncture, we deem it fit to consider few decisions, on this aspect. (i) In HVPNL v. Mahavir reported in (2004) 10 SCC 86, while dealing with an order passed by the State Consumer Disputes Redressal Commission, the Hon'ble Apex Court held that the appellate forum is bound to refer to the pleadings of the case, submissions of the counsel, necessary points for consideration, discuss the evidence, and then to dispose of the matter by giving valid reasons. (ii) In Tata Engineering & Locomotive Co. Ltd., v. Collector of Central Excise, Pune reported in 2006 (203) ELT 360 (SC), the Hon'ble Supreme Court, dealing with a case, whereby, a cryptic and non-speaking order, the Tribunal upheld the order passed by the Commissioner, by a....