COMMISSIONER OF CENTRAL EXCISE Vs. KAPOOR INDUSTRIES

JUDGEMENT

(1.) BEING aggrieved with the order passed by the Commissioner (Appeals), the Revenue has filed the present appeal. The respondents have also filed cross objection inasmuch as the part of the impugned order of the Commissioner (Appeals) has confirmed the duty against the respondent along with imposition of penalty to the extent of Rs. 2,96,881. We have heard Shri V.P. Batra, learned Departmental representative appearing for the Revenue and Shri B.L. Narasimhan, the learned advocate appearing for the respondents.

(2.) AS per facts on record, the respondents are engaged in the manufacture of terry towels and made -ups falling under Chapters 58 and 63 of the Central Excise Tariff Act, 1985. During the period relevant for the purpose of present appeal, i.e., from July 22, 2002 to April 8, 2004, they procured HSD/ULSD without payment of the Central excise duty in terms of rule 19(2) of the Central Excise Rules, 2002 read with Notification No. , dated June 26, 2001. The said duty -free fuel was procured by the assessee after following the due procedure of the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001 and after execution of general surety security bond B -1.

(3.) ON the basis of further investigation, the Revenue entertained a view that inasmuch as ULSD/HSD is a material not used directly in the manufacture of export goods but the same is used only for generation of electricity, which is further used for manufacture of excisable goods, the benefit under the said Rules read with Notification No. , were not available to them. Accordingly, proceedings were initiated by way of issuance of show -cause notice proposing confirmation of demand of duty of Rs. 40,72,816 and of Rs. 2,96,881. The said proceedings resulted in confirmation of demand of duty along with interest and imposition of penalty on both the respondents.