Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs
New Delhi,18th April, 2007
Circular No. 848/06/2007-CX
F.No.109/2/2004-CX.3
Subject:- Withdrawal of circulars 44/89-CX.3 dated 19.7.1989 and 56/89-CX.3
dated 21.9.1989- regarding.
- I am directed to invite your attention to Board’s Circular No. 44/89-CX.3, dated
19.7.1989, wherein the field formations were instructed that no central excise
duty is to be paid on prilled ammonium nitrate obtained from melt ammonium
nitrate, and that no modvat of such duty, even if paid is to be allowed, in
pursuance of Tribunal’s order in case of M/s. Anil Chemicals Pvt. Ltd. [1985
(21) ELT.889(T)]. In another Circular No. 56/89- CX-3, dt. 21.9.1989, it was
instructed that the instructions issued vide Circular dt. 19.7.89 would apply,
mutatis mutandis to the process of conversion of ammonium nitrate melt into
crystalline coated ammonium nitrate.
- Subsequent to this, the larger Bench of the CESTAT in the case of Supreme
Chemicals Works Vs. CCE, Jaipur [2000 (119) ELT 707 (Tribunal-LB)] had held that
ammonium nitrate in the form of fine powder particles obtained from crude lumps
of ammonium nitrate, damaged calcium ammonium nitrate (CAN) and ammonium nitrate
melt satisfy the two tests – one of manufacture and other of marketability, for
subjecting any goods to levy of excise duty. The Tribunal further held that the
statement of law laid down in CCE, Aurangabad Vs. Anil Chemicals Pvt. Limited
must be held to be incorrect. Based on the law laid down by the larger Bench of
the Tribunal, the regular Bench has decided accordingly the appeals in the case
of M/s. Supreme Chemicals works vide its final order No. 360-62/2000-C dt.
03.8.2000.
- It has been decided by the Board to accept the above said order of larger
bench dated 7.6.2000, and final order of the tribunal dated 3.8.2000 on this
issue. Consequently, Board has decided to withdraw the circulars Nos.
44/89-CX.3, dated 19.7.1989, and 56/89-CX.3, dated 21.9.1989, as they are
inconsistent with the settled position of law. Therefore, the Circulars Nos.
44/89-CX-3 & 56/89-Cx-3 may be treated as withdrawn.
- Pending disputes, if any, may be decided accordingly.
- Trade and field formations may be suitably informed.
- Hindi version will follow.
Yours faithfully,
( Dilip Goyal )
Under Secretary (CX.3)