TMI Blog2020 (12) TMI 845X X X X Extracts X X X X X X X X Extracts X X X X ..... oration and production. Whereas Sl.No.13 mentions about gas based inter-mediate products. Sub-Sl. No.(i) refers to gas exploration and production. It is evident that the schedule not only refers to certain products but also to certain processes. The only inference one can get is that the products generated in the processes mentioned are covered by the entry and are eligible for exemption. Going by the manufacturing process given by the respondents and not disputed by the Revenue, we find that Solvex GL is manufactured during the process of production of LPG gas which is subsequently bottled and sold. The exemption cannot be restricted to products which are formed in the gaseous stage alone for the reason that the exemption refers to gas based intermediate products and gas exploration and production. The correct interpretation of gas based products would go to include all the products which are produced in the processes of production of gas/LPG. The argument taken by the appellants appears to be farfetched for the reason that even LPG for which the exemption was extended by the department is also in the bottle and sold in the liquefied form. The Notification does not give any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under Sl.No.13(i); it is also not covered under any other entry of the schedule to the Notification No.33/99 dated 08.07.1999; under Sub-Sl.No.13(i) gas exploration and production has been specified under sub-Sl.No.(ii) to (xii). Different other products, which are manufactured out of Petroleum gas as basic starting raw material has been specified; Sub-Sl.No.13(i) refers to gases only i.e. items which are gaseous at a standard/normal temperature and pressure; therefore Solvex GL, which is not gaseous and is not covered under the exemption Notification. 3. The Learned Authorized Representative also submitted the following:- (1) Gas based intermediate products have been specified at Sl.No.13 of schedule to the Notification No.33/99 dated 08.07.1999 as amended, to be eligible for exemption. Under sub- serial No.(i) Gas exploration and Production has been specified. Under sub-Sl.No.13(ii) to (xii), different products which are manufactured out of Petroleum gas as basic starting raw material has been specified. (2) Sub-serial No.13(i) refers to gas only, i.e., items which are gaseous at standard/normal temperature and pressure. The items which are not gaseous at STP/NTP do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and liquid substances, such as, plastics , fertilizers , yarn raw materials , nitric acid and ammonium nitrate . Copy of the Notification No.33/99-CE dated 08.07.1999 is annexed and marked as Annexure-R-1 (2) Under Serial No.13, the first entry is gas exploration and production . Under this entry, the Respondent claims exemption on LPG and Solvex-GL. There is no dispute about exemption on LPG because the department allowed exemption on LPG after the Committee of Disputes (COD) had refused permission to the department to challenge Commissioner(Appeals) order dated 03.07.2002 granting exemption to LPG. The present dispute is whether Solvex-GL is covered under the first entry of Serial No.13 and is eligible for exemption. (3) Solvex-GL produced during the production of LPG from natural gas and is used as raw materials in paints and rubber industries. Its process of manufacture is as follows. Natural Gas is compressed at a high pressure and after compression it is expanded to achieve a very low temperature within this process the natural gas gets liquefied. The liquefied gas is then brought to the distillation columns wherein both the products get separated in the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssure and after compression it is expanded to achieve a very low temperature and in the process the natural gas gets liquefied; the liquefied gas is then brought to the destination column wherein both the products i.e. LPG and Solvex GL are separated; whereas LPG being lighter is collected from the top of the column and Solvex GL is recovered from the bottom; natural gas normally comprises of C-1, C-2, C-3, C-4, C-5, C-6 + and includes small portion of N2, CO2 etc.; whereas LPG comprises of C-3 C-4, Solvex GL comprises of mainly C-5 and C-6; therefore both LLPT as well as Solvex GL are the two intermediate gaseous products of processed natural gas being recovered and stored under pressure as liquid. 8. We find that the Notification No.33/99 provides for exemption to goods specified in the schedule appended to the Notification and cleared from a unit located in the state of Assam or Tripura or Meghalaya or Mizoram or Nagaland or Arunachal Pradesh as the case may be, from so much of the duty of excise, leviable thereon, under any of the said acts as is equivalent to the amount of duty paid by the manufacturer of goods from the account current maintained under Rule 9 read wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Authorized Representative on the issue that while LPG is produced after liquefaction of gas and Solvex GL is produced or occurs in liquid form naturally is not acceptable. 9. We are of the considered opinion that the Notification does not give any such interpretation. It is clear that the entry 13 of the schedule refers to certain products which are not gaseous in nature. The main heading gas based intermediate products has to include all the products intermediate or finally produced or occurring or manufactured in the process of exploration and production of gas. The distinction that the department is trying to bring in between liquids and gases is not acceptable. The products mentioned at Sub-Sl. Nos. of Sl.No.13 to the schedule to the Notification are not gases. If one takes the view that the exemption is only applicable to products occurring in gaseous state are alone eligible for exemption to the items like plastics, fertilizers. Ammonium Nitrate etc. would not have formed a place in the list of the products made to be eligible for the Notification. Therefore an appropriate reading of the Notification would give an understanding that the main activity referred to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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