H.R. Syiem, Member (T)

1. The Collector of Central Excise (Appeals), Bombay decided in his Order-in-Appeal No. M-2420/AUR-80/84, dated 4th December, 1984 that prilled ammonium nitrate was not liable to duty. The factory M/s. Anil Chemicals Pvt. Limited, Aurangabad buy ammonium nitrate of 75% to 82% and by the process of prilling concentrate, convert the ammonium nitrate to 99%. This process of concentration was held by the Assistant Collector of Central Excise, Aurangabad, to be a process of manufacture and he directed the factory to pay duty of Rs. 74,846.82 by his Order No. V. 68(4)-5/TB/84/1443, dated 21st February, 1984.

2. The factory buys ammonium nitrate from M/s. Rashtriya Chemicals and Fertilizers. This ammonium nitrate is cleared on payment of duty under item 68. The Asstt. Collector said that duty paid 75% concentrated ammonium nitrate melt is processed and converted into prilled ammonium nitrate. The ammonium nitrate melt cannot be used as such unless water is evaporated. The end-product manufactured by the party is used for different purposes such I as raw materials for explosives, drug industries, textile industries and even though it is a physical conversion, the