By TIOL News Service

MUMBAI, JUNE 23, 2014: VIDE an o-in-a dated 19/08/2013, the Commissioner(A), Nagpur held that the fly ash generated in the respondent's power plantsituated at Chandrapur is not excisable and accordingly not dutiable. Consequently, a demand of excise duty of Rs.6,61,885/- along with interest thereon and also imposing penalties have been set aside.

Revenue is in appeal before the CESTAT against this order and in their appeal memorandum has taken the plea that an excise levy of 1% was introduced on fly ash under Chapter 26 with effect from 01/03/2011 and since the demand pertains to the period 01/03/2011 to 28/02/2012, the demand is sustainable.

The respondent did not turn up for the hearing.

The Bench observed -

“3. The issue is whether fly ash is a manufactured item or not. Merely because fly ash is marketed, it cannot be concluded that fly ash is “manufactured goods”. Inasmuch as the item was held to be non-excisable by the lower appellate authority relying on the decision of the Hon'ble Apex Court in the case of UOI Vs. Ahmedabad Electricity Co. - 2003 (158) ELT 3 (SC) 2003-TIOL-17-SC-CX, the Revenue has not made out a case for grant of stay of the order….”

In fine, the Stay petition filed by the Revenue was dismissed.

Budget 2011 : From the Explanatory Notes -

26.2 Current exemption on Fly ash is being withdrawn. It will now attract 1% duty without CENVAT credit facility. [S. No. 15 of Notification No.76/86-CE as superseded by Notification No. 17 /2011-CE dated the 1st March 2011 read with S. No. 27 of Notification No. 1/2011-CE & S.No.14 of Notification No. 2/2011-CE refers]

(See 2014-TIOL-1088-CESTAT-MUM)