TMI Blog1998 (2) TMI 336X X X X Extracts X X X X X X X X Extracts X X X X ..... Lean Gas has been held to be an excisable item classifiable under sub-heading 2705.00 of the Central Excise Tariff attracting duty of excise at the rate of 12% ad valorem. 3. Appeal No. E-4107/94 is against the Order of the Commissioner of Central Excise, Bolpur conveyed vide Order-in-Original No. V(15)61-SH-2803.00/ CE/BOL/92-9/94 and V(15)18/SH-2705.00/ CE/BOL/ 92-10/94, dated 26-9-1994. Vide the said order, duty of Rs. 614.730 lakhs and Rs. 415.967 lakhs has been confirmed against the appellant firm on Off Gas/lean Gas emerged in the Appellants factory during the period from 1-3-1986 to 31-3-1988 and 1-4-1988 to 28-2-1989, on the ground that the same has been manufactured by the appellants and consumed captively by them as fuel. Apart from confirming the above demands of duties, penalty of Rs. 60 lakhs and 40 lakhs has also been imposed by the Commissioner. 4. In the third Appeal No. 302/95, Revenue has also challenged the same Order dated 26-9-1994 passed by the Commissioner of Customs and Central Excise (Appeals), in terms of the provisions of Section 35E(1) of the Central Excises and Salt Act, 1944 and prayed for setting aside the same on the ground that Off Gas/Lean Gas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the benefit of Notification No. 118/75, dated 30-4-1975 was being enjoyed by the appellants herein. With the introduction of the new Central Excise Tariff in the year, 1986, the appellants again submitted the Classification List with its jurisdictional Assistant Commissioner of Central Excise classifying the product under Chapter 28 and claiming exemption in terms of Notification No. 217/86, dated 2-6-1986. Dispute started thereafter, with the Department while claiming the classification of Heading 27.05 of the Central Excise Tariff attracting 12% ad valorem rate of duty as against the appellants claim to its classification under Chapter 28. 6. During the adjudication proceedings and the appeal proceedings before the first appellate authority, the appellants made a case stating that this Lean Gas which is nothing but a mixture of various waste gases essentially generated during the process of manufacture of carbon black, cannot be held to be excisable inasmuch as they are in the shape of an essential by-product and are not marketable. They further contended that no RG 1 stage can be said to have arrived in the case of such Lean Gas. 7. The appellants contention is that they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of crude gases known as Lean Gas or Off Gas which emerges in the course of manufacture of Carbon Black. Chemically, these are liquid hydro-carbons. One of the components of this Gas is Carbon monoxide which is an extraneous gas and cannot be flared up in the atmosphere, being a hazardous one. In terms of the Anti-Pollution Laws, the appellants are required to burn the Carbonmonoxide content out of this mixture of gases, before venting out the remaining constituents of the Lean Gas. While burning the Carbon monoxide gas out of the Off Gas, certain heat is generated, which is used by them for their rotaters in the manufacturing operation. This particular fact has been considered by the Commissioner as a leading factor to hold the gases in question as excisable goods, inasmuch as the same is to be used captively by the appellants as fuel for the purpose of heat generation, during the burning process. The appellants contention is that though this proposition is a casual affair for them for generation of heat, neverthless, they are compelled by the process of law to burn the Carbon monoxide before release of the rest of the gases into the atmosphere. It is only to put to use the he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d December, 1988 To All Principal Collectors All Collectors of Central Excise Customs All Collectors of Central Excise All Collectors of Customs All Collectors of Central Excise (Appeals) Sir/Madam, Subject : Central Excise - Mixture of crude gases referred to as `Lean gas yielded during manufacture of Carbon Black - Question of excisability - Regarding. I have been directed to say that a doubt has been raised regarding the excisability or otherwise of a mixture of crude gases which are referred to as `Lean Gas , consisting of Nitrogen, Carbon-dioxide, Water Vapour, Carbon-monoxide and some other inert gases, generated in the course of manufacture of Carbon Black, and which are released into the atmosphere after the incineration of Carbon-monoxide content. 2. A reference in this regard has been made by the Indian Chemical Manufacturers Association. The matter has been examined by the Board. It is observed that a mixture of crude gases as mentioned above gets generated in the manufacture of Carbon Black, Carbon Black is manufactured by incomplete combustion or thermal decomposition of natural gas or petroleum oil. After the recovery of Carb ..... X X X X Extracts X X X X X X X X Extracts X X X X
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