HINDUSTAN ZINC LTD. Vs. CCE, JAIPUR

JUDGEMENT

(1.) HEARD both sides. The appellant filed this appeal against Order -in -Appeal dated 18.11.1992 whereby the duty is demanded in respect of Sulphuric Acid used in the manufacture of Phosphoric Acid, which was cleared on payment of duty to the manufacture of the fertilizers. The contention of the appellant is that they are manufacturing Sulphuric Acid which was converted into Phosphoric Acid and the same was cleared on payment of duty to IFFCO which is used. In the manufacture of fertilizer. Appellant cleared the goods and availed the benefit of Notification No. 81/75 -CE dated 22.3.1975 which exempt the Sulphuric Acid from payment of Central Excise Duty which is intended for use in the manufacture of fertilizer. The appellant also relied upon clarification dated 12.12.1986 issued by the Ministry of finance, Department of Revenue where in the case of Hindustan Lever Ltd., who are also manufacturing Sulphuric Acid and this Sulphuric Acid used in the manufacture of Phosphoric Acid and the same is is cleared to the manufacture of fertilizer, the Board clarified that in such situation the benefit of Notification No. 87/75 -CE dated 22.3.1975 is available to such Sulphuric Acid. Appellant also relied upon the decision of the Tribunal in the case Kumar Chemicals & Industries Ltd. v. CCE, Chennai -, 2004 (63) RLT 312 :, 2004 (115) ECR 91 (T). The contention of the Revenue is that appellant are not clearing the Sulphuric Acid directly to the manufacture of fertilizer. In fact they are clearing Phosphoric Acid on payment of duty. Therefore, benefit of Notification is not available to the appellant.

(2.) WE find that Notification No. 81/75 -CE provides exemption to Sulphuric Acid which is intended for use in the manufacture of fertilizer. The appellants are manufacturing Sulphuric Acid, which was later on converted into Phosphoric Acid and the same was cleared to manufactures of fertilizers. This factual aspect is disputed by Revenue. The Government of India, Ministry of Finance vide letter dated 12th December 1986 clarified the position for availability of benefit of Notification No. 81/75 -CE in respect of Sulphuric Acid which was converted into Phosphoric Acid and cleared to manufactures of the fertilizer. For ready reference the letter is reproduced below: - -