9911796707
TMI Blog1997 (2) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... ding that the appellant is not entitled to the benefit of exemption Notification No. 7/65-C.E., dated 30-1-1965. 2.The facts of this case are in a narrow compass. The appellants manufacture carbon dioxide of ISI specification out of raw carbon dioxide gas received through pipe line from M/s. FACT Ltd., Eloor. The raw carbon dioxide is odourous and has a purity of less than 99% and contains moisture above 0.1%. Such raw carbon dioxide is subjected to various processes in order to remove traces of moisture, oxide of sulphur etc. The gas is then dried and fed into Rotary Booster compressor to boost the pressure to a very high point and then passed through activated carbon to remove final traces of oil and also to deodourise. The pure gas obtained after these processes is liquified and filled in cylinders and removed therefrom for making further products or for sale. 3.At the relevant time, Carbonic Acid (carbon dioxide) was specified in Entry No. 14H(iv) of the 1st Schedule to the Central Excise Act, 1944 and was assessable to duty of excise at the rates in force from time to time. The appellants had taken out L 4 licence for the manufacture of carbon dioxide. They were permitted to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riff Advice No. 83/81, dated 24-8-1981 of the Central Board of Excise and Customs and held thus : "The question to be decided in this case is whether the appellants are entitled to avail the benefit of Notification No. 7/65, dated 30-1-1965. The appellants rely on the Trade Notice No. 220/81 issued from file C. No. V/68/30/3/81 C6 by the Collector of Central Excise, Cochin. In this trade notice, it has been informed that the carbon dioxide gas produced in distilleries and fertiliser factories or in any other factory will fall outside the purview of item 14H. So long as the gas does not conform to the marketable grade as prescribed in the ISI specifications, such gas will be properly classifiable under Item 68. The appellants were allowed to avail Notification No. 7/65. But the trade notice referred to above is in favour of the assessee and would be binding on the department (New Gujarat Paper Industries v. Superintendent of Central Excise - 1977 (1) E.L.T. (J 67) Guj. Div. B). Hence the order of the Asstt. Collector making duty retrospectively is not correct. Besides I am of the view that the carbon dioxide gas produced from the fertiliser factory of M/s. FACT will fall outside t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fair; (2) The Appellate Tribunal was totally in error in discarding the Trade Notice No. 220/81 based on Tariff Advice No. 83/81, dated 24-8-1981 of the Central Board of Excise and Customs which was communicated to the appellants for information. (The said Trade Notice is available at page 125 of the Paperbook). The Appellate Tribunal failed to understand and give effect to the terms of the above trade notice, and the reasons to discard the trade notice relied on by the Appellate Collector are unsustainable. A larger contention on the merits to the effect that "waste gas" is not a marketable commodity and is not exigible to duty, was also raised relying on the decision in Union of India v. Indian Aluminium [1995 (77) E.L.T. 268]. 11.The relevant Trade Notice relied on by the Appellate Collector is available at page 125 of the Paperbook. It is as follows : "Trade Notice No. 220/81 -9-1981.dated T.I. 68 A.C.C. Nes. No. 42/81 Sub : GASES. Carbon Dioxide gas emanating from Distillery portion of Sugar factories and Fertiliser factories whether classifiable under T.I. 14H or T.I. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... below 50%. It should not, therefore, be considered as Carbon Dioxide and, further, as such a mixture of waste gases does not conform to any specifications of Carbon Dioxide as such and it should be outside the purview of Item 14H on the analogy of kiln gas. Similarly, the Carbon dioxide gas generated in the fertiliser factories is also impure and does not conform to the marketable grade and hence it will also fall outside the purview of Item 14H. The Board has accepted the recommendations of the Conference5. that Carbon dioxide produced in distilleries as well as in the fertiliser Factories will fall outside the purview of Item 14H and will be properly classifiable under Item 68. The Board is also of the view that Carbon dioxide gas generated by any other factory will also fall outside the purview of Item 14H so long as it does not conform to the marketable standard of the carbon dioxide as prescribed in the ISI specifications. The above position may please be brought to the notice of the6. field formations for their information and guidance. The Trade interests may also be informed as in the Model Trade Notice. Receipt of this letter may please be acknowledged.7. Sd/- G. N. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Collectors in pursuance of the above tariff advice of the Central Board of Excise and Customs. The Tribunal also omitted to notice that the earlier tariff advice No. 83/81 was in force at the time when the proceeding was pending before the Assistant Collector and she passed the order on 2-2-1982 and also when the Appellate Collector set aside the above order and gave relief to the assessee by his order dated 18-8-1982. The concerned department understood the legal position then as reflected in the trade advice and trade notice of the year 1981. It was a plausible view of the matter. It was pointedly stated that the carbon dioxide gas generated in the fertilizer factories is also impure and does not conform "to the marketable grade" and hence it will also fall outside the purview of Item 14H. Whether the later tariff advice No. 6/85 adverted to all relevant aspects or deviated from 1981 tariff advice and if so, to what extent, are not detailedly stated in the order of the Tribunal (Paragraph 51). The earlier tariff advice and trade notice categorically stated that in the absence of non-conformity to the marketable grade (standard) "impure carbon dioxide not conforming to I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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