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TMI Blog2008 (9) TMI 301X X X X Extracts X X X X X X X X Extracts X X X X ..... t arise for consideration are that the respondents are manufacturing nitrogen gas by using atmospheric air and in the course of manufacturing oxygen gas comes into existence, which is released in to air. Show cause notice was issued for reversal of proportionate Cenvat credit on nitrogen used in such oxygen manufacturing. Revenue was aggrieved by the order of adjudicating authority of dropping the proceedings initiated, preferred an appeal to first appellate authority. Ld. Commissioner (Appeals) while rejecting the appeal of revenue noted as under:- "The respondent is manufacturing Nitrogen gas by using atmospheric air. The air so taken is first compressed then dust and moisture are removed and carbon dioxide and carbon monoxide are separa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon the judgment of CESTAT in the case of CCE, Surat v. M/s. Kline Chemicals Pvt. Ltd. - 2005 (184) E.L.T. 261 (Tri.-Kolkata) wherein it was held that gases lost during manufacturing process to be considered as used in or in relation to manufacturing process and Modvat credit cannot be denied on the quantum of gas lost. He also relied upon the judgment of Cestat in the case of M/s. BOC India Ltd., v. CCE, Chennai - 2003 (158) E.L.T. 47 (Tri.-Kolkata) wherein it was held that the provisions of Rule 57 CC would not be applicable in as much as the same are to be invoked where an Respondent is engaged in manufacture of the products-one attracting duty and other being cleared on nil rate of duty. On these grounds, he withdrew the SCN". "I hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elation to manufacturing process and hence Modvat/Cenvat credit cannot be denied. The same view has been taken in the case reported in 2005 (184) E.L.T. 261 (Tri.-Mumbai) and this case law has attained finality. In any case, the fact remains that the input "liquid nitrogen" is most essential input for deriving nitrogen gas and during the process of manufacture, oxygen gets released to atmosphere in the instant case. Therefore in the light of above discussion, revenue appeal does not succeed". 5. The revenue's case, in the grounds of appeal is that the Commissioner (Appeals) has failed to appreciate that the case laws relied upon by him are not applicable in this case. Oxygen gas, which is allowed to escape in to the atmosphere is not char ..... X X X X Extracts X X X X X X X X Extracts X X X X
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