# COMMISSIONER OF CENTRAL EXCISE, VADODARA v. INDIAN PETROCHEMICALS CORPN. LTD. &ANR

- **Citation:** [2015] 7 S.C.R. 1046
- **Court:** Supreme Court of India
- **Decided:** 2015-05-12
- **Case number:** Civil Appeal Nos. 3623-3624 of 2005
- **Bench:** A.K. Sikri, R. F. Nariman
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/commissioner-of-central-excise-vadodara-v-indian-petrochemicals-corpn-ltd-anr-30834
- **Pages:** 8

## Headnote

Central Excise Tariff Act, 1985:
Chapter heading 27. 11- Petroleum gases and other gaseous hydrocarbons - Notification No. 612000-C.E. dated
01. 03. 2000- Interpretation of- Partial exemption from payment of duty, in terms of Notification No. 612000-C.E. dt
0 01. 03. 2000- Entitlement to -Assessee manufacturing petrochemical, C4 Raffinate- Department classifying the product under Chapter Heading 2711.12 as butylenes, issued
show cause notice to assessee demanding differential 8%
duty-Assessee's case that product classified under chapE ter sub-heading 2711.19 and as per the Notification, 50% of
the duty of excise specified in the First Schedule, was payable - Demand of 8% differential duty by the DepartmentIn appeal, tribunal upholding the case of assessee - Interference 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 hydrocarbons other than natural gas, ethylene, propylene, butylene
and butadiene' - There is no comma after the words 'gaseous hydrocarbons' - Expression 'other than' appearing afG 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) ButaA
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, propylene, butylenes and butadiene are also excluded, then C4 Raffinate is not excluded since it is not exclusively a or
any 'butylene' but is a mix of 'butylenes' - However; since C4 Raffinate is liquefied petroleum gas ft is covered by the C
description of 'Liquefied Petroleum gases and other gaseous
hydrocarbons' under the Notification. -
'\1fChapter heading 27. 11-Petroleum gases and other gaseous hydrocarbons -Assessee manufacturing petrochemiD
cal propylene - Partial exemption from payment of duty, in
terms of Notification No. 612000 dated 01. 03.2000- Entitlement to- Held: Propylene is one of the products which qualifies for partial exemption from payment of duty by the said E
Notification.

## Text

[2015}7 S.C.R.1046
A
COMMISSIONER OF CENTRAL EXCISE, VADODARA
B
c
v.
INDIAN PETROCHEMICALS CORPN. LTD. &ANR.
(Civil Appeal Nos. 3623-3624 of 2005)
MAY 12, 2015.
[A.K. SIKRI AND R. F. NARIMAN, JJ.]
Central Excise Tariff Act, 1985:
Chapter heading 27. 11- Petroleum gases and other gaseous hydrocarbons - Notification No. 612000-C.E. dated
01. 03. 2000- Interpretation of- Partial exemption from payment of duty, in terms of Notification No. 612000-C.E. dt
0 01. 03. 2000- Entitlement to -Assessee manufacturing petrochemical, C4 Raffinate- Department classifying the product under Chapter Heading 2711.12 as butylenes, issued
show cause notice to assessee demanding differential 8%
duty-Assessee's case that product classified under chapE ter sub-heading 2711.19 and as per the Notification, 50% of
the duty of excise specified in the First Schedule, was payable - Demand of 8% differential duty by the DepartmentIn appeal, tribunal upholding the case of assessee - Interference 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 hydrocarbons other than natural gas, ethylene, propylene, butylene
and butadiene' - There is no comma after the words 'gaseous hydrocarbons' - Expression 'other than' appearing afG 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) ButaA
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, propylene, butylenes and butadiene are also excluded, then C4 Raffinate is not excluded since it is not exclusively a or
any 'butylene' but is a mix of 'butylenes' - However; since C4 Raffinate is liquefied petroleum gas ft is covered by the C
description of 'Liquefied Petroleum gases and other gaseous
hydrocarbons' under the Notification. -
'\1fChapter heading 27. 11-Petroleum gases and other gaseous hydrocarbons -Assessee manufacturing petrochemiD
cal propylene - Partial exemption from payment of duty, in
terms of Notification No. 612000 dated 01. 03.2000- Entitlement to- Held: Propylene is one of the products which qualifies 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 ApF
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
C.A. NOs. 262-263 OF 2010
C.A. NO. 4264 OF 2011
G
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.
c
The Judgment of the Court was delivered by
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 17 4 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
H
Petroleum gases and other gaseous
hydrocarbons
-Liquefied:
COMMNR. OF CENTRAL EXCISE, VADODARA v. INDIAN1049
PETROCHEMICALS CORP. LTD. [A. K. SIKRI, J.]
2711.11
-Naturalgas
2711.12
- Ethylene, propylene, butylene and butadiene
2711 .19
- Other
-In gaseous state:
2711.21
- Natural gas
2711.29
-Other
A
B
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:-
c
D
E
Chapter or! Description
of Rate under the Rate
Condition
heading
goods
First Schedule under the No.
No. or subSecond
heading
Schedule
No.
27.11
'Liquefied
Fifty per cent
-
-
: Petroleum
Gases of the duty of
... i and other gaseous excise
; hydrocarbons other specified in the
1th an natural gas. First Schedule
,
ethylene,
. I propylene,
1-blJtylene
! butadiene
and
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 1-32000 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
hydrocarbons with exclusion of natural gas,: "'
'
~;·-_!h.Y~
(ii) Ethylene,
•,.....,
(iii) Propylene,
1 yHr
(iv) Butylene and
... b·
(v) Butadiene.
,.,,
E
F
The above submissions is reinforced 9v.a.romparison G
with SI. No. 30 of Notification No. 75/84-C.E., dated 3-31984 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
• I
[2015] 7 S.C.R.
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".
c
D
E
F
G
H
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.
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.
(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
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.
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
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
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. 3/2001C .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.
9. Consequently, all these appeals preferred by the
Department are hereby dismissed.
Nidhi Jain
Appeals dismissed.
F