IPCL Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) WHEN the application seeking waiver of pre -deposit of duty amounting to Rs. 56,79,62,795 was argued by Shri V. Sridharan, it appeared that at this stage itself the main appeal could be taken up for disposal. Both sides agreeing, this was done after granting waiver of pre -deposit as prayed for.

(2.) THE appellants use Raw Naphtha as the main raw material. Thermal cracking of such Naphtha results in several products, one of which is pyrolysis gasoline. This product is further used in the manufacture of other products. The appellants had filed classification list for such intermediate product pyrolysis gasoline from time to time. They had claimed classification under sub -heading 2707.90, and later under 2710.19. During this period the assessee had claimed the benefit of Notification No. 28/89 -CE as amended and later of Notification No. 217/86 -CE as amended which notifications permitted duty free consumption of certain substances in the manufacture of resultant products. With effect from 16.3.95, the assessees sought similar benefit of Notification No. 67/95 -CE. This notification however, denied the facility to goods falling under sub -headings 2710, 2710.11, 2710.12, 2710.13 and 2710,19. In seeking to avail the benefit of this Notification, the assessees had claimed classification under heading 2710.90.

(3.) SHOW cause notice was issued on 2.2.98 alleging that pyrolysis gasoline was correctly classifiable under heading 2710.19 and that in the absence of the benefit of Notification No. 67/95, the assessees were required to discharge the burden of duty thereupon. The duty on goods so captively consumed without payment of duty was calculated at the figure of differential duty referred to in paragraph 1 of the order above, vide a number of show cause notice. The Assistant Commissioner adjudicated 9 such show cause notices confirming the duty. Against this order the assessees filed an appeal, the Commissioner (Appeals) vide his order dated 24.12.98 directed them to deposit Rs. 28,39,31,392. He later modified the quantum of deposit at Rs. 20 crores by his order dated 22.9.99 on noticing the failure of the assessees to obey his directions, he dismissed the appeal under power of Section 35F of the Central Excise Act, 1944. Hence the appeal and the present application.