INDIAN OIL CORPORATION LTD. Vs. CCE

JUDGEMENT

(1.) THESE group of appeals has been filed by the appellant Indian Oil Corporation Ltd. against the order of the Commissioner of Central Excise and Customs, Vadodara, made on 21.10.2000 by which he confirmed the demand of excise duty made in nine separate show cause notices.

(2.) THE eight show cause notices were for different periods from June 1991 to May 1994 while the ninth one was for the period from July 1995 to December 1995. The show cause notices for demand came to be issued because the department felt that the appellant had cleared the product RCO (Reduced Crude Oil) and LSHS (Low Sulphur Heavy stock) at 'nil' rate of duty on the ground that it was used within the factory for generation of electricity for their captive consumption. The appellant had in the classification list claimed the benefit of the Notification No. 75/84 dated 1.3.84. It was alleged in the show cause notices, that the condition laid down in that notification was not fulfilled and, therefore, clearance at 'nil' rate of duty was illegal and inadmissible. The classification list indicated that the said product was intended for use as fuel for generation of electricity by specified undertaking, in a refinery. All the notices were of similar nature except the difference in the last notice dated 30.2.1996, in which instead of Serial No. 4, Serial No. 9 was mentioned after the amendment in the earlier entries.

(3.) IN their defence, the appellant had raised the contention that they were petroleum refinery and having regard to their needs they had their own thermal power station, the electricity generated from which was used for their refinery purposes. The appellant had obtained sanction of the State Government under Section 28 of the Electricity Act, 1910, for producing power to meet the requirement of electrical energy required in running the plants and for various auxiliary services of their own and those of their associated agencies etc. According to the appellant, the fuel RCO (LSHS) used by them for generation of electrical energy in their thermal power station was eligible for exemption from payment of whole of duty of Central Excise in terms of the Notification No. 75/84 -CE dated 1.3.1984, as amended, because they had complied with the conditions specified under column No. 4 of the table against Serial No. 54. The electrical energy produced by the appellant was not only for their own consumption, but was also to be supplied/sold to other associate agencies such as GEB for onward supply to consumers, ONGC, SBI, Telephone Exchange, Koyali, Post Office and Mayur Stores Refinery Township. According to them, the thermal power station was situated within the licenced/refinery premises. On that basis reliance was also placed on Serial No. 34 of the table annexed to the said notification as well as on Notification No. 217/86 -CE dated 2.4.1986, as amended for claiming the benefit of exemption.