Prilled ammonium nitrate – Dutiability – Board releases draft circular
Vide Board’s Circular No. 44/89-CX.3 dated 19.7.1989, the field formations were instructed that no central excise duty is to be paid on prilled ammonium nitrate obtained from melt ammonium nitrate and 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. 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.
After this, the larger Bench of the CESTAT in the case of Supreme Chemicals Works Vs. CCE, Jaipur, 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 the appeals in the case of M/s. Supreme Chemicals works accordingly 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 circular 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 Therefore the Circulars Nos. 44/89-CX-3 & 56/89-Cx-3 may be treated as withdrawn.
Board wants that pending disputes, if any, to be decided accordingly.
But why did it take the Board seven years to decide the issue? No answer, apparently!
Board wants your opinion on this draft circular by 5th April 2007.