COMMISSIONER OF CENTRAL EXCISE Vs. HINDUSTAN ZINC LTD.

JUDGEMENT

(1.) In this appeal filed by the Revenue the issue involved is whether the benefit of Notification No. 67/95 -C.E., dated 16 -3 -1995 is available to M/s. Hindustan Zinc Ltd. in respect of lead sheet and wires used captively in the lining of storage tank.

(2.) Shri Virag Gupta, learned D.R., submitted that M/s. Hindustan Zinc Ltd. manufacture Zinc Ingot and Sulphuric Acid; that they had manufacture lead sheet and wires and used them captively for repairs/maintenance i.e. lining of storage tank without payment of duty availing the benefit of Notification No. 67/95 -C.E.; that the Asstt. Commissioner had confirmed the demand on the ground that lead sheets are not capital goods as they are classified under Heading 78.04 of the Central Excise Tariff Act which is not covered under the definition of capital goods under Rule 57AA(a)(i) of the Central Excise Rules, 1944; that however, on appeal, the Commissioner (Appeals) set aside the demand on the ground that storage tanks whose lining material was replaced by lead sheets and wire are meant for storage of Zinc Sulphate solution and such use tantamount to use in or in relation to the manufacture of finished product. The learned D.R., further, submitted that the tanks are used in the storage of one of their final products which clearly shows that the manufacturing process has been completed, and therefore, it can very well be concluded that the storage tanks are not used in or in relation to the manufacture of the final product; that accordingly lead sheets and wires manufactured by the Respondents and used captively are not eligible for exemption under Notification No. 67/95.

(3.) On the other hand Shri M.P. Devnath, learned Advocate, submitted that lead sheets and wires are used for replacement of worked out lining of the tank which gets frequently corroded because of the nature of acid and require constant replacement; that the process of manufacture will also include storage of the product, particularly, the product which is in a liquid state, and therefore, it cannot be claimed by the Revenue that the storage tanks are not used in or in relation to the manufacture of final product.