NATIONAL FERTILIZERS LTD. Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) IN these two appeals M/s. National Fertilizer Ltd. are only challenging the imposition of penalty and demand of interest on the duty.

(2.) SHRI A.C. Jain, learned Advocate, submitted that the Appellants manufactured Urea fertilizers, that they were procuring Furnace Oil, Heavy Petroleum Stock, Low Sulphur Heavy Stock (LSHS) at nil rate of duty in terms of Notification No. 5/99 -C.E., dated 28 -2 -1999 and subsequent Notifications; that exemption under said Notification was available if the products mentioned therein were intended for use as feed stock in the manufacture of fertilizers; that if the inputs were intended for use otherwise as feed stock in the manufacture of fertilizers, concessional rate of duty was payable subject to the observations of the conditions mentioned in the Notification; that initially, the Appellate Tribunal vide Order No. 946 -948/99 -CE., dated 1 -11 -1999 [reported in 1999 (114) E.L.T. 1033] in their own case has held that furnace oil etc. used in the generation of steam which was further used in the manufacture of fertilizer was feed stock eligible for nil rate of duty; that in view of this decision, they continued to avail of full exemption of duty on furnace oil used by them in generating steams. However, the Supreme Court took a different view in the case of Gujarat Narmada Valley Fertilizers Co. v. CCE, Vadodara [2001 (128) E.L.T. 13 (S.C.)] wherein it has been held that such use of furnace oil etc. is other than feed stock and is eligible for concessional rate of duty and not for the exemption from whole of the payment of duty, that in the present two appeals, the Department has demanded Central Excise duty for the period from January, 2000 to September, 2000 and also imposed penalty and has demanded interest. Learned Advocate contended that during the period they availed of exemption from payment of whole of the duty they were following the decision of the Tribunal delivered or pronounced in their own matters and as such they have not done anything contrary to law; that on the other hand, they were acting according to law prevailing during the relevant period; that the law has changed only after the pronouncement of the judgment of the Supreme Court on 18 -1 -2001 in the case of Gujarat Narmada Valley Fertilisers; that in view of these facts, no penalty under the provisions of Rule 173Q(1)(a) is imposable on the Appellants.

(3.) LEARNED Advocate, finally submitted that no interest is payable on them under Section 11AB of the Central Excise Act as during the relevant period, the interest was payable only if the duty has been short levied or short paid by reason of fraud, collusion or any wilful mis -statement of suppression of facts etc. that as they had discharged the duty as per the law laid down by the Appellate Tribunal in their own case, it can not be alleged that there was any fraud or suppression by the Appellants. He also relied upon the decision in the case of National Fertilisers Ltd. v. CCE, New Delhi [2004 (164) E.L.T. 455 (Tri.)].