2001 (10) TMI 111

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....ts manufacture furnace oil is used by it. A part of the furnace oil is used in the manufacture of steam, which is further used in running the rotary equipments like, turbines, generating sets, compressors, pumps etc. The respondent paid concessional rate of duty on the furnace oil. Every year the plant used to be shut-down for a period of one month for repair and maintenance and during this period no fertilizer or ammonia was manufactured. However, the respondent was using the furnace oil for the manufacture of steam, which in turn was used in the manufacture of electricity in its captive power generating plant. Thus, although no manufacturing process took place during the shut-down period, but the furnace oil was used for the maintenance a....

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....e following question of law :- "Whether CEGAT was correct in setting aside the Order-in-Original and allowing the appeal of the party due to mis-quoting of Rules by the adjudicating authority in operative part of the Order-in-Original and the CEGAT has not decided the case on merits?" 5.We have heard Mr. Kamal Sehgal, learned Counsel for the Revenue on merits as well. 6.Firstly, in the present case the demand has been made under Rule 9(2) of the 1944 Rules read with proviso to Section 11A(1) of the 1944 Act. This could not be ordered because under Rule 9(2) a demand can only be made on the contravention of Rule 9(1), i.e., if the goods have been removed. As per Rule 9(1) of the 1944 Rules, "no excisable goods shall be removed from ....

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....roduct, i.e. fertilizer. For the effective running of any plant, maintenance and overhauling of the machinery is necessary. It is an integral part in the process of production. Similar question came up for adjudication before their Lordships of the Apex Court in Collector of Central Excise, Calcutta-II v. M/s. Eastend Paper Industries Ltd. [1989 (43) E.L.T. 201 (S.C.) = AIR 1990 SC 1893], where it was held "where any particular process..……......is so integrally connected with the ultimate production of goods that, but for that process, manufacture of processing of goods would be commercially inexpedient, articles required in that process, would fall within the expression 'in the manufacture of goods'." Similar question also arose in Ind....