COMMISSIONER OF CENTRAL EXCISE, VADODARAversusINDIAN PETROCHEMICALS CORPN. LTD. &ANR.

                         [2015}7 S.C.R.1046


A     COMMISSIONER OF CENTRAL EXCISE, VADODARA
                                   v.
         INDIAN PETROCHEMICALS CORPN. LTD. &ANR.
                (Civil Appeal Nos. 3623-3624 of 2005)
B
                            MAY 12, 2015.
               [A.K. SIKRI AND R. F. NARIMAN, JJ.]
         Central Excise Tariff Act, 1985:
c         Chapter heading 27. 11- Petroleum gases and other gas-
     eous hydrocarbons - Notification No. 612000-C.E. dated
     01. 03. 2000- Interpretation of- Partial exemption from pay-
    ment of duty, in terms of Notification No. 612000-C.E. dt
0   01. 03. 2000- Entitlement to -Assessee manufacturing pet-
    rochemical, C4 Raffinate- Department classifying the prod-
    uct under Chapter Heading 2711.12 as butylenes, issued
    show cause notice to assessee demanding differential 8%
    duty-Assessee's case that product classified under chap-
E   ter sub-heading 2711.19 and as per the Notification, 50% of
    the duty of excise specified in the First Schedule, was pay-
    able - Demand of 8% differential duty by the Department-
    In appeal, tribunal upholding the case of assessee - Inter-
    ference with- Held: Not called for- SI. No. 24 of Notification
F   No. 612000-C.E., dated 1-3-2000 confers partial exemption
    to 'Liquefied Petroleum gases and other gaseous hydrocar-
    bons other than natural gas, ethylene, propylene, butylene
    and butadiene' - There is no comma after the words 'gas-
    eous hydrocarbons' - Expression 'other than' appearing af-
G   terthe words 'gaseous hydro carbons' and before the words
    'natural gas' would qualify only the words 'natural gas' - Thus,
    the following goods are covered (i) Liquefied petroleum gas
    and other gaseous hydrocarbons with exclusion of natural

H                                1046
COMMNR. OF CENTRAL EXCISE, VADODARA v. INDIAN1047
                                     I

        PETROCHEMICALS CORP. LTD.

gas, (ii) Ethylene, (iii)Propylene, (iv) Butylene and (v) Buta- A
diene - Even if C-4 Raffinate is treated as Butylene, the
Notification would be applicable, specification of butylenes
in the said SI. No. 24 is not for the purpose of its exclusion,
but for its specific enumeration and inclusion - Further; even
if the description of goods against SI. No. 24 of Notification B
No. 612000-C.E., is interpreted to mean that ethylene, pro-
pylene, butylenes and butadiene are also excluded, then C-
4 Raffinate is not excluded since it is not exclusively a or
any 'butylene' but is a mix of 'butylenes' - However; since C-
4 Raffinate is liquefied petroleum gas ft is covered by the C
description of 'Liquefied Petroleum gases and other gaseous
hydrocarbons' under the Notification. -
                                  '\1f-

     Chapter heading 27. 11- Petroleum gases and other gas-
eous hydrocarbons -Assessee manufacturing petrochemi- D
cal propylene - Partial exemption from payment of duty, in
terms of Notification No. 612000 dated 01. 03.2000- Entitle-
ment to- Held: Propylene is one of the products which quali-
fies for partial exemption from payment of duty by the said E
Notification.
   CIVIL APPELLATE JURISDICTION: Civil Appeal Nos.
3623-3624 of 2005 etc.
    From the Judgment and Order dated 27 .01.2005 in Ap- F
peal No. E/3616,3617/03 passed by the Customs, Excise and
Service Tax Appellate Tribunal, Circuit Bench, Ahmadabad.

                              WITH
    C.A. NO. 1034 OF 2007                                      G
    C.A. NOs. 262-263 OF 2010
    C.A. NO. 4264 OF 2011
    Yashank Adhyaru, K. Radhakrishnan, Nisha Bagchi, H
1048       SUPREME COURT REPORTS                    [2015)7 S.C.R.


 A Rupesh Kumar, Arijit Prasad, Sujeeta Srivastava, Pooja
   Sharma, B. Krishna Prasad for the Appellant.

         S. K. Bagaria, V Lakshmikumaran, M.P. Devanath, Vivek
   Sharma, L. Charanaya, R. Ramchandran,Aditya Bhattacharya,
 B Hemant Bajaj, Anandh K., Ambarish Pandey, Abhinav Agrawal,
   MaheshAgarwal, RishiAgrawala, E.C. Agrawala, Rohit Jolly
   for the Respondents.

         The Judgment of the Court was delivered by
c        A. K. SIKRI, J. 1. These batch of appeals pertain to Indian
    Petrochemical Corporation Limited (in short 'IPCL') and in the
    fourth appeal, the assessee is Indian Oil Corporation.

        2. IPCL is engaged in the manufacture of various types of
D petrochemicals, falling under Chapter 27 and 29 of Central
   Excise Tariff Act, 1985. It holds valid Central Excise registration
   under Rule 174 of the Central Excise Rules 1944. One of the
  products which is manufactured by IPCL is C4 Raffinate. On
  this, the IPCL has been paying 8 per cent duty, as it has been
E claiming the benefit of Notification No. 6/2000 dated
  01.03.2000. We may mention that the normal rate of duty of
  the aforesaid product is 16 per cent. However, by virtue of the
  aforesaid notification, in respect of certain products duty is
  halved. The question arose as to whether the IPCL is entitled
F to the benefit of the aforesaid notification and in that context,
  the issue of classification of this product fell for consideration.
  The IPCL has classified the product under chapter sub-heading
  2711.19. Chapter Heading Entry 27.11 reads as under: -
G      27.11       Petroleum gases and other gaseous
                   hydrocarbons

                   -Liquefied:

H
COMMNR. OF CENTRAL EXCISE, VADODARA v. INDIAN1049
   PETROCHEMICALS CORP. LTD. [A. K. SIKRI, J.]

  2711.11     -Naturalgas                                       A

  2711.12     - Ethylene, propylene, butylene and butadiene

  2711 .19    - Other

              -In gaseous state:                                B

  2711.21     - Natural gas

  2711.29     -Other

    3. As per the Department, the aforesaid product should C
have been classified under Chapter Heading 2711.12 as
butylene. On that basis, show cause notice was issued
demanding excise duty at the rate of 16 per cent ad valorem
and asking the IPCL to pay the differential duty as duty paid by D
IPCL was at the rate of 8 per cent. The.IPCL·replied to the
show cause notice sticking to its position that the as per the
aforesaid exemption Notification, 50 per cent of the duty of
excise specified in the First Schedule, was payable.

     4. In the Order-in-Original passed by the Commissioner, E
the demand of duty as claimed in the show cause notice was
confirmed rejecting the contention of the IPCL. However, in
an appeal filed before the Customs, Excise and Service Tax
Appellate Tribunal (hereinafter referred to as 'CESTAT'), IPCL F
has emerged successful inasmuch as its contention is
accepted.

     5. On going through the order of the Commissioner as
well as the CESTAT, we find that both the authorities below
have entered into the various facets of the dispute and gone G
into the entire gamut of controversy. Many of the findings of
the Commissioner in his order have not found favour with the
CESTAT in the impugned decision rendered by it. We have
heard learned counsel for the parties on all the aspects and H
1050           SUPREME COURT REPORTS                       [2015] 7 S.C.R.


 A have gone through the orders minutely through which we were
   taken byJhe learned counsel appearing for the parties. We
   are, however, of the opinion that it is not necessary to even
   advert to all those aspects of the matter inasmuch as the fulcrum
   of the dis'pute pertains to the interpretation which is to be
 B accorded to the language used in Notification No. 6/2000 which
   confers, as mentioned above, partial exemption. It reads as
   under:-
       Chapter or! Description       of Rate under the Rate      Condition
       heading     goods                First Schedule under the No.
 c     No. or sub-                                     Second
       heading                                         Schedule
       No.
       27.11       'Liquefied           Fifty per cent
                   : Petroleum Gases of the duty of
                                                              -      -
               ... i and other gaseous excise
 D                 ; hydrocarbons other specified in the
                   1th an natural gas. First Schedule
                , ethylene,
                  .I propylene,
                   1-blJtylene     and
                   ! butadiene




 E
       6. Tfi~basic contention of Mr. YashankAdhyaru, learned
  senior counsel appearing for the appellant, was that the
  aforesaid notification exempts liquified petroleum gases (LPG)
  as well as other gaseous hydro carbons and excludes
F specifically natural gases, ethylene, propylene, butylene and
  butadiene. On the other hand, learned counsel appearing for
  the respondents have argued that the words "other than" qualify
  only natural gases and according to him, if read in this manner,
  the products which would fall within the exempted category for
G payment of'concessional rate of excise duty would be LPG,
  other gaseous hydro carbons excluding natural gas, ethylene,
  propylene, butylene and butadiene.

      7. We find that the construction as sought to be given by
 H IPCL appears to be correct. This aspect has been dealt with
COMMNR. OF CENTRAL EXCISE, VAOODARA'v. INDIAN1051
   PETROCHEMICALS CORP. LTD, [A. K. SIKRI, J.]

by the CESTAT in para 5.5 of the judgment and since we are A
agreeing with the said interpretation given by the Tribunal, we
reproduce hereunder the said para in its entirety: -
                                             J\..      .,      •.


    "5.5     As regards the eligibility to the Notification Sr.
    No. 24 thereof, it is found -                               B

    (i) SI. No. 24 of Notification NO. 6/2000-C.E., dated 1-3-
    2000 confers partial exemption to "Liquefied Petroleum
    gases and other gaseous hydrocarbons other than
    n~tural gas, ethylene, propylene, butylene and                  c
    butadiene". (emphasis supplied)

     In the aforesaid SI. No. 24 of Notification No. 5/2000,
    there is no comma after the words 'gaseous
    hydrocarbons'. Therefore, the expression;other than"
                                                                0
    appearing after the words "gaseous hydrocarbons" and
    before the words "natural gas" would qualify only the words
    "natural gas". In other words, the following goods are
    covered by the aforesaid SI. Nos.             "
      (i) liquefied petroleum gas and other gaseous                 E
    hydrocarbons with exclusion of natural gas,: "'
                        '                           ~;·-_!h.Y~

                                                    •,.....,
       (ii) Ethylene,

       (iii) Propylene,                              1   yHr        F
       (iv) Butylene and
                                                    ... b·
       (v) Butadiene.                                   ,.,,
       The above submissions is reinforced 9v.a.romparison G
    with SI. No. 30 of Notification No. 75/84-C.E., dated 3-3-
    1984 as introduced by Notification No. 120/86-C.E., dated
    1-3-1986 which stood in the manner, dining the entire
    period from 1-3-1986 to 28-2-1994.
                                                               H
1052     SUPREME COURT REPORTS                       [2015] 7 S.C.R.
              • I




 A     F.5 The said SI. No. 30 of Notification No. 75/84 reads
       thus: -1

       "Liquefied petroleum gases and other gaseous
       hydrocarbons, other than natural gas, ethylene, propylene,
 B     butylene and butadiene".

       as in the above Notification No. 75/84, there was a comma
       after gaseous hydrocarbons, unlike present Notification
       No. 6/2000, SI. No. 24 thereof.
c      Therefore, even if C-4 Raffinate is treated as Butylene SI.
       No. 24 of Notification No. 6/2000-C.E., would be
       applicable, specification of butylenes in the said SI. No.
       24 is notforthe purpose of its exclusion, but for the purpose
       of its specific enumeration and inclusion.
D
        (ii) Even if the description of goods against SI. No. 24 of
       Notification No. 6/2000-C.E., is interpreted to mean that
       ethylene, propylene, butylenes and butadiene are also
       excluded, then C-4 Raffinate is not excluded since it is
E      not exclusively a er any 'butylene' but is a mix of 'butylenes'.
       In view of the findings arrived in paras supra. However,
       since C-4 Raffinate is liquefied petroleum gas it is
       covered by the description of the "Liquefied Petroleum
       gases and other gaseous hydrocarbons" under SI. No.
F
       24 of the above notification, Raffinate, even if it is assumed
       as butylene is not excluded from coverage of SI. No. 24 of
       the Notification No. 6/2000, but would stand included in
       the first part of the Notification as liquefied petroleum
G      gases.
                             I   "J.
       (iii) The order of the Commissioner on the question of
       availability of exemption Notification No. 6/2000-C.E.,
       dated 1-3-2000 and No. 3/2001-C.E., dated 1-3-2001 is
       purely based on the intention of the legislature on the basis
H
 COMMNR. OF CENTRAL EXCISE, VADODARA v. INDIAN1053
    PETROCHEl\lllCALS CORP. LTD. [A. K. SIKRI, J.]

      of the Finance Minister's speech. However, it is well A
      settled legal position that the notification has to be
      interpreted on the basis of plain meaning of words and
      intention behind the notification cannot be a basis to
      interpret the notification. Commissioner has not refuted
      any of the submissions made by the appellants, on the B ·
      interpretation of the notification. If the interpretation of the
      department on Sr. No. 24 of N("\tification No. 6/2000-C.E.,
      dated 1-3-2000 and Sr. No. 34 of Notification No. 3/2001-
      C.E., dated 1-3-2001 is accepted then the simple way of
      giving the description of the goods under the said Sr. Nos. C
      of the Notifications, would have been "goods falling under
      sub-heading 2711.19", if the Government wanted to extend·
      the concessional rate of duty in respect of liquefied
      petroleum gas and other hydrocarbons except natural gas. D
      Hence the interpretation as adopted by the Commissioner
      based on the intention of the legislature on the basis of
      Finance Minister's speech is wholly incorrect."

      8. Insofar as Indian Oil Corporation is concerned, the only
_difference is that it is manufacturing a produc(known as E
 propylene. Since it is also one of the products which qualifies
 for partial exemption from payment of duty by_Notification No.
 6/2000 dated 01.03.2000, result in both the cases would be
 the same.
                                                                     F
    9. Consequently, all these appeals preferred by the
 Department are hereby dismissed.

 Nidhi Jain                                     Appeals dismissed.