NRC LIMITED Vs. CCE

JUDGEMENT

(1.) THIS is the party's appeal against the impugned order in appeal No. PCJ/640/Bom -III/94 dated 25.10.1994 praying for setting aside the same along with order -in -original dated 19.3.1993 with consequential relief and any other suitable relief.

(2.) IN support of the appeal, appellant through its employee Shri N.K. Rajvant has submitted in the course of arguments that Rule 57D(2) of Central Excise Rules is not properly appreciated in this case, as caustic soda was both final product and intermediate product for the manufacture of final product on which appropriate duty was being paid. Modvat credit in respect of same inputs cannot be denied merely because such intermediate product was exempted under notification No. 9/69 -CE dated 15.1.1969 under the above rules, if intermediate product is exempted from the whole of duty of excise leviable thereon or charged to nil rate of duty, where final product is dutiable. Any product coming into existence, which is further used for manufacturing in different quality can also be considered as intermediate product for the purpose of availment of modvat credit. Classification list indicating the said position, filed by the appellant, approved by the Assistant Collector is ignored. Demand of modvat credit in respect of same inputs was illegal and baseless. Impugned order is liable to be rejected. Caustic soda is made by cell electrolysis process. In the cells brine solution of 310 gms./ltr. NaCl is circulated while electrolysis the NaCl content in the brine drops down to 260/370 gms./ltr. NaCl content. To make good of the depletion brine resaturated in the saturators which are kept filled with salt (NaCl). During saturation the brine picks up impurity viz. Ca, Mg and sulphate also along with salt. This brine is not suitable for electrolysis unless the impurities are removed and brine is purified. It is not appreciated in the impugned order that caustic soda is used to purify brine water, is further used to manufacture final products, on which appropriate duty was paid. Merely because caustic soda is exempted at the intermediate stage for using for purification of brine water, the mod vat credit cannot be denied as the said is used in manufacturing final product on which excise duty is being paid. Ignoring the approved classification list under notification No. 217/86 dated 2.4.1986 which is not reviewed by Assistant Collector by issuing show -cause notice under the Central Excise Rules. in the case of Tata Chemicals Ltd. v. CCE, Rajkot is relied on. (Paras 5 and 7). The Learned DR Shri Ashokan has strongly supported the orders of lower authorities and urged that there are no satisfactory grounds to set aside the impugned order.

(3.) POINT for consideration is whether the appeal can be allowed and orders of lower authorities can be set aside. My finding thereon is in the affirmative.