COMMR. OF CENTRAL EXCISE CHENNAI-I vs CHENNAI PETROLEUM CORPN. LTD.

The Supreme Court held that naptha is a petroleum product under the Central Excise Tariff Act, 1985, and thus the assessee, M/s. Chennai Petroleum Corporation Ltd., is entitled to exemption for RFO used in its production. The Court agreed with the Tribunal's finding that sulphur produced from RFO is a by-product and not subject to duty. Consequently, the show cause notice dated 22nd December, 1998 was deemed invalid, and the demands for duty were not sustainable, resulting in a favorable outcome for the assessee.