Case: Commissioner of Central Excise, Mumbai Vs. M/s. National Organic Chemical Industries Limited

counsel appearing for the respondent submitted that he is not questioning the well-settled proposition of law, but the respondent assessee in this case is entitled to the benefits of the notification on a plain reading of the notification. 24. Mr. Shroff further placed reliance on the following decisions: In Union of India & Others v. Tata Iron & Steel Company Limited, 1977 (1) ELT 61 , a four-Judge bench of this Court held as under: "23. .. The High Court rightly said that the Notification does not say that exemption is granted only when duty paid pig iron is used and that the exemption would not be available if duty-paid pig iron is mixed with other non-duty paid materials. If the intention of the Government were to exclude the exemption to duty-paid pig iron when mixed with other materials then the notification would have used the expression "only" or "exclusively" or "entirely" in regard to duty-paid pig iron. The object of the notification was to grant relief by exempting the duty-paid pig iron." 25. In Indian Farmers Fertiliser Cooperative Limited v. Commissioner of Central Excise, Ahmedabad, 1996 (86) ELT 177 , this Court observed as under: "7. ..The Exemption Notification does not require that the ammonia should be used directly in the manufacture of fertilisers. It requires only that the ammonia should be used in the manufacture of fertilisers. The Exemption Notification must be so construed as to give due weight to the liberal language it uses. The ammonia used in the water treatment, steam generation and inert gas generation plants, which are a necessary part of the process of manufacturing urea, must, therefore, be held to be used in the manufacture of ammonia and the raw naphtha used for the manufacture thereof is entitled to the duty exemption." 26. Mr. Shroff also placed reliance on Indian Petrochemicals Corporation Ltd. V. Collector of Central Excise, Vadodara 1997 (92) ELT 294. In this case, this Court observed as under: "19. Under this notification pyrolysis gasolene which falls under chapter 27 is produced in the appellants factory and it is utilised for the manufacture of goods. As such it would be exempt from the whole of the duty of excise leviable thereon assuming that any duty of excise is leviable on it. Therefore, we fail to see how any duty of excise can be levied on any part of pyrolysis gasolene manufactured in the factory of the appellant.20. Pyrolysis Gasolene being an intermediate product which is produced in the factory of the appellant, and it being utilised for the manufacture of other goods, it would be totally exempt from payment of excise duty under the second exemption notification." 27. In National Organic Chemical Industries Ltd. V. Collector of Central Excise, Bombay 1997 (89) ELT 643 , this Court observed as under: "11. Crude petroleum is refined to produce raw naphtha. Raw naphtha is further refined, or cracked, to produce the said products. This is not controverted. It seems to us to make no difference that the appellants buy the raw naphtha from others. The question is to be judged regardless of this, and the question is whether the intervention of the raw naphtha would justify the finding that the said products are not "derived from refining of crude petroleum". The refining of crude petroleum produces various products at different stages. Raw naphtha is one such state. The further refining, or cracking, of raw naphtha results in the said products. The source of the said products is crude petroleum. The said products must, therefore, be held to have been derived from crude petroleum." 28. In Doypack Systems (Pvt.) Ltd. v. Union of India 1988 (36) ELT 201 , this Court had an occasion to examine the expressions "pertaining to", "in relation to" and "arising out of" and observed as under: "46. .... The expressions "pertaining to", "in relation to" and "arising out of", used in the deeming provision, are used in the expansive sense, as per decisions of courts, meanings found in standard dictionaries, and the principles of broad and liberal interpretation in consonance with Article 39(b) and (c) of the Constitution." 29. Mr. Shroff further placed reliance on Commissioner of Central Excise, Coimbatore v. Jawahar Mills Ltd. 2001 (132) ELT 3 wherein this Court whilst interpreting the words "used in the factory of manufacture" used in clause (c) of the Explanation to Rule 57 Q (1) held that the goods need not be used for producing the final product or used in the process of any goods for the manufacture of final product or used for bringing about any change in any substance for the manufacture of final product and the only requirement is that the same should be used in the factory of the manufacturer. Thus, it can be seen that the language used in the explanation is very liberal. 30. We have heard the learned counsel for the parties at length and perused the judgments cited at the Bar. The Tribunals finding that the ethylene and propylene used as refrigerant has been used in or in relation to the manufacture of the same goods. The inevitable and automatic emergence of ethane and methane, therefore, by itself is no ground for denying the exemption contained in the notification. The Tribunal came to the categoric finding that the respondent could not have manufactured ethylene and propylene without manufacturing its by-products ethane and methane. The Tribunal held that in any technology the emergence of ethane and methane was inevitable and hence while it is no doubt correct to say that the ethylene and propylene have been used in or in relation to the manufacture of ethane and methane, the identical quantity of the same goods has simultaneously been used in the manufacture of ethylene and propylene. The emergence of ethane and methane, therefore, cannot be a ground to deny the benefit of exemption to the respondent. 31. In our considered view, no interference is called for in the well-reasoned judgment/order of the Tribunal.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]We have heard the learned counsel for the parties at length and perused the judgments cited at the Bar. The Tribunals finding that the ethylene and propylene used as refrigerant has been used in or in relation to the manufacture of the same goods. The inevitable and automatic emergence of ethane and methane, therefore, by itself is no ground for denying the exemption contained in the notification. The Tribunal came to the categoric finding that the respondent could not have manufactured ethylene and propylene without manufacturing its by-products ethane and methane. The Tribunal held that in any technology the emergence of ethane and methane was inevitable and hence while it is no doubt correct to say that the ethylene and propylene have been used in or in relation to the manufacture of ethane and methane, the identical quantity of the same goods has simultaneously been used in the manufacture of ethylene and propylene. The emergence of ethane and methane, therefore, cannot be a ground to deny the benefit of exemption to theour considered view, no interference is called for in the well-reasoned judgment/order of the Tribunal.