Customs, Excise and Gold Tribunal - Delhi
Amrit Vanaspati Co. Ltd. vs Collector Of Central Excise on 13 January, 1987
Equivalent citations: 1987(12)ECC43, 1987(11)ECR431(TRI.-DELHI), 1987(29)ELT213(TRI-DEL)
ORDER P.C. Jain, Member (T)
1. Brief facts in this case are as follows:
The appellant manufactured oxygen gas arising during the course of manufacture of its main product namely vegetable product and supplied the gas through a pipeline to M/s Goel Gases located in the precincts of the appellant's factory. The said M/s Goel Gases after compressing the oxygen gas so received from the appellant paid duty on it under Tariff Item 14-H of CET. It was alleged by a show cause notice dated 2-9-1979 that the appellant failed to pay duty on the said oxygen gas during the period November 1975 to 17-6-1977 inasmuch as what was supplied by the appellant to M/s Goel Gases was a product falling under Tariff Item l4-H. After considering the defence of the appellant, the Deputy Collector of Central Excise, Meerut dropped the proceedings. The Collector of Central Excise, Meerut, however, issued a show cause notice dated 10-5-82 asking the appellant as to why the order passed by the Deputy Collector of Central Excise be not set aside. By the impugned order the said order of the Deputy Collector of Central Excise has been set aside and a demand of Rs. 42,799.28p on the oxygen gas cleared by the appellant during the period November 1975 to 17-6-1977 has been confirmed.
2. The appellant contends that the gas supplied by it to M/s Goel Gases was not covered by the Tariff Item 14-H which read as follows during the relevant period:
"Compressed, liquified or solidified gases the following namely -(i) Oxygen ...
On 18-6-1977 the aforesaid Tariff Item was changed to gases including liquified and solidified, the following namely
(i) Oxygen ...
3. The learned advocate for the appellant states that with the change in the Tariff entry the appellant started paying duty w.e.f. 18-6-1977. Uptil 17-6-1977 the appellant was not covered by the Tariff Entry 'Compressed Gases'. The term 'Compressed Gases' has to be understood in the manner in which it is understood in the trade and industry. This has been held so by the Supreme Court in its judgment in the case of South Bihar Sugar Mills Ltd. and Anr. v. Union of India 1978 ELT (J-336). The appellant has further submitted that mere transportation of gas through a pipeline cannot be called a compressed gas. Compressed oxygen gas is something which is compressed in cylinders or other containers with very high pressure. In the instant case no pressure whatsoever has been applied by the appellant. In any case the duty has been paid by M/s Goel Gases as 'compressed oxygen gas' after the said M/s Goel Gases had compressed it into cylinders. In view of these facts and submissions the learned advocate submits that the impugned order is plainly illegal and incorrect.
4. Learned SDR appearing for the Revenue has reiterated the findings of the Collector in the impugned order.
5. We have carefully considered the pleas advanced on both sides. We observe that para 15 of the Supreme Court judgment mentioned supra and specifically relied upon by the learned advocate for the appellant is a direct authority on the point at issue as to what is a compressed gas. Although that decision is on compressed oxygen gas the observations of the Supreme Court would be equally relevant on the compressed oxygen gas, the commodity under consideration in the instant case. The Supreme Court has observed as follows in the context of Carbon dioxide:-
"Compressed carbon dioxide is understood generally as carbon dioxide compressed in cylinders with pressure ranging from 1000 to 1800 Ibs per sq. inch. The mere fact that at one stage or the other kiln gas is compressed at 40 to 45 Ibs per sq. inch by a pump or otherwise cannot mean that it is compressed carbon dioxide."
We also observe that the gas supplied by the appellant has been compressed by M/s Goel Gases on which duty has been charged by the department as compressed oxygen gas. We fail to follow that if duty has been levied and charged from M/s Goel Gases under the same description namely, compressed oxygen gas, how the appellant could be charged again for the same under the same description. It would amount to charging duty twice over on the same commodity which is patently illegal. Accordingly, we set aside the impugned order and allow the appeal.
6. In view of our finding on the substantive issue, we do not find it necessary to make any comment on the plea of limitation taken up by the learned advocate for the appellant.