CCE Vs. MAZDA INDUSTRIAL CHEMICALS PVT.

JUDGEMENT

(1.) THE respondents are manufacturers of Surface Active Agents falling under Tariff 15AA, before 1.3.1986. They manufacture Surface Active Agent Slurry from Alkyl Benzene and Sulphuric Acid and pay Central Excise duty. Such duty -paid Surface Active Agent Slurry is captively consumed for further processing into wetting out agents and emulsifiers. They availed exemption on these products under Notification No. 101/66 dated 17.2.1966 in terms of serial No. 4 of the table annexed to the notification. The proceedings in these cases relate to eligibility for the exemption.

(2.) ARGUING the appeals for the Revenue, learned S.D.R. Shri H.K. Jain submitted that the respondents had availed this exemption under serial No. 4 of Notification No. 101/66. He submitted that these exemptions were in respect of "emulsifiers, wetting -out agents, softeners and other like products intended for use in any industrial process". He submitted that test reports have shown that the goods in question were only Surface Active Agents and not preparations as envisaged in the notification. He, therefore, submitted that the respondents were not eligible for the exemption. He also submitted that chemical test reports and evidence of Chemical Examiner have shown that the goods continued to be Surface Active Agents even after these processes were carried out by the respondents. Therefore, they could not be given the exemption intended for preparations from Surface Active Agents.

(3.) ARGUING for the respondents, Shri D.B. Shroff, learned Counsel drew our attention to serial No. 4 of the relevant notification which reads as under: Sl. No. Description Conditions 4. E mulsifiers, wetting out If in respect of surface -active agents, softeners and other agents used in the manufacture of like preparations intended such emulsifiers, wetting out for use in any industrial agents, softeners and other like prcess preparations the appropriate amount of the duty of excise or the additional duty under Section 2A of the Indian Tariff Act, 1934 (32 of 1934), has already been paid or where such surface -active agents are purchased from the open market on or after the 20th day of January, 1968. Shri D.B. Shroff, learned Counsel explained that twenty -four out of twenty -five show cause notices in these appeals proceeded on the basis that the respondents could not have paid duty on the slurry and availed themselves of exemption under Notification No. 101/66 in view of the provisions of Rule 9(3) of the Central Excise Rules, 1944. He submitted that this allegation has no basis at all as the Commissioner (Appeals) has rightly held that if two provisions afford different facilities/concessions, it is up to the assessees to choose between them. Therefore, the choice as to whether they should have availed of the provision for duty free captive consumption under Rule 9 or availed themselves of the exemption under Notification No. 101/66, was entirely for the assessee to make and the adjudication order was in clear error in holding that the respondents should have availed of the facility for duty free captive consumption of the slurry. He also submitted that in the instant case such a choice did not arise at all, inasmuch as the final product, namely, wetting -out agents and emulsifiers in question were exempt and the respondents could not have made use of the provision under Rule 9(3) relating to duty free captive consumption of intermediate products when the final product itself was exempt.