Case Law Details
Haldia Petrochemicals Limited Vs Commissioner of Central Excise (CESTAT Kolkata)
Introduction: The CESTAT Kolkata has issued a ruling in Excise Appeal No. 762/2010, filed by Haldia Petrochemicals Limited against the duty demand imposed by the Commissioner of Central Excise. The appeal challenged the duty demand of Rs. 10,67,40,103/- along with interest and penalty. Haldia Petrochemicals is engaged in the manufacture of dutiable final products and had set up a co-generation power plant to meet its electricity and steam requirements. The issue in question relates to the clearance of residual fuel gas (RFG), an intermediate excisable product, for job work under Rule 4(5)(a) of the Cenvat Credit Rules.
Analysis: The dispute in this case revolves around whether RFG, generated by Haldia Petrochemicals through the cracking of naphtha, could be cleared without payment of duty for job work under Rule 4(5)(a) of the Cenvat Credit Rules. The appellant had previously cleared another intermediate product, known as CLS, to its co-generation power plant for the generation of steam and electricity, and the duty demand on the clearance of CLS was dropped in a previous case. In the present case, the CESTAT Kolkata refers to its previous decision and holds that RFG can be cleared under the same rule for job work. The tribunal also rejects the invocation of the extended period of limitation, as prior communications had informed the jurisdictional superintendent about the clearance of RFG for job work.
Conclusion: The CESTAT Kolkata rules in favor of Haldia Petrochemicals Limited in Excise Appeal No. 762/2010. The tribunal holds that RFG, an intermediate excisable product generated by the company, can be cleared for job work under Rule 4(5)(a) of the Cenvat Credit Rules. The duty demand imposed by the Commissioner of Central Excise is dropped based on the tribunal’s previous decision in the company’s own case. The invocation of the extended period of limitation is also rejected due to prior communications informing the jurisdictional superintendent about the clearance of RFG for job work.
FULL TEXT OF THE CESTAT KOLKATA ORDER
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