Ashutosh Mohunta, J. - (1.) THE present reference petition is against the order of the Customs, Excise & Gold (Control) Appellate Tribunal, New Delhi (hereinafter referred to as 'the CEGAT'), dated September 7,2000.
(2.) RESPONDENT No, 1 - M/s. National Fertilizer Ltd., Bathinda - is engaged in the manufacture of fertilizer and ammonia. For its manufacture furnace oil is used by it. A part of the furnace oil is used in the manufacture of steam, which is further used in running the rotary equipments like, turbines, generating sets, compressors, pumps etc. The respondent paid concessional rate of duty on the furnace oil. Every year the plant used to be shutdown for a period of one month for repair and maintenance and during this period no fertilizer or ammonia was manufactured. However, the respondent was using the furnace oil for the manufacture of steam, which in turn was used in the manufacture of electricity in its captive power generating plant. Thus, although no manufacturing process took place during the shut -down period, but the furnace oil was used for the maintenance and repair of the plant and machinery. A show cause notice was issued to the respondent, stating that it had contravened the provisions of Rules 196(1) and 210 of the Central Excise Rules, 1944, and that it had violated the provisions of Chapter X inasmuch as it had not used the furnace oil in the manufacture of fertilizer and thereby it had evaded the Central Excise Duty to the tune of Rs. 10,67,785.56 during the period May, 1990 to May, 1994. It was also alleged that as no manufacturing process had taken place during the shut -down period, therefore the respondent was not entitled to the concessional rate of duty. The respondent submitted its reply to the show cause notice, but the adjudicating authority confirmed the demand under Rule 9(2) of the Central Excise Rules, 1944 read with Section 11A of the Central Excises and Salt Act, 1944.
(3.) AN appeal was filed before the Commissioner (Appeals), Central Excise, who vide his order dated December 26, 1997 dismissed it and confirmed the demand of Rs. 10,67,985.56 under Rule 9(2) of the 1944 Rules read with proviso to Section 11A of the 1944 Act. The respondent filed an appeal before the CEGAT. It set aside the order of the Commissioner on the ground that "when the ingredients of the contravention of Rule 9(1) are not found to be established a demand under Rule 9(2) read with proviso to Section 11A, as ordered, cannot be sustained". The Revenue has filed the present petition against the order of the CEGAT and has claimed the following question of law : - "Whether CEGAT was correct in setting aside the Order -in -Original and allowing the appeal of the party due to misquoting of Rules by the adjudicating authority in operative part of the Order -in -Original and the CEGAT has not decided the case on merits -;