2. At the outset it was stated by Mr C. Hari Shankar, learned Senior counsel
for the Petitioner on instructions that the Petitioner was not pressing W.P.
(C) No. 1926 of 2000 which challenges the CEGAT’s order dated 14th
March 2000 emanating from the SCN dated 5th July 1990. Accordingly the
present challenge is confined to the CEGAT’s order dated 15 th April 1998
emanating from the SCN dated 19th February 1991 pertaining to the period
1st March 1986 to 31st December 1989.
3. The facts are that the Petitioner, inter alia, owns and operates a
manufacturing unit in Meerut District, Uttar Pradesh and known as Daurala
Sugar Works. The Petitioner has been operating a chemical plant at the said
factory at Daurala where it is engaged in the manufacture and sale of various
W.P.(C) Nos. 3951/1998 & 1926/2000 Page 2 of 27
chemicals falling under Chapters 28, 29 and 38 of the Schedule to Central
Excise Tariff Act, 1985 („CET Act‟). One of the items manufactured by the
Petitioner is Phenyl Acetic Acid („PAA‟) classified under Chapter 29 of the
CET . It is stated that in the manufacture of PAA two intermediate products
are manufactured which are captively consumed viz., Benzyl Chloride
(„BeCL‟) and Benzyl Cyanide („BeCN‟). BeCN is used as an input for the
manufacture two final products: PAA, which is exempt from payment of
excise duty and its ‘Aqueous Layer’ which is classified under the heading
38.23 of the CET and is subject to 15% excise duty chargeable ad valorem.
Source: Indian Kanoon