TMI Blog2001 (9) TMI 147X X X X Extracts X X X X X X X X Extracts X X X X ..... es including propane and butane. GAIL separates from the natural gas propane and butane which put together become liquefied gas (LPG). The leftover gas is turned as lean gas. One of the first steps in the process was the passing of the natural gas through molecular sieves. Molecular sieves are microporous structure composed of crystalline aluminosilicates or crystalline aluminophosphates. Sieves separate smaller molecules from larger molecules. Since they are capable of removing water molecules, such sieves are used for drying of gas. The appellant took credit of the duty paid on such sieves and utilised it for payment of duty on the final product i.e., LPG. Lean gas was exempted from payment of duty under Notification No. 5/98. 3.A show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en filed an appeal. The Commissioner (Appeals) referred to the Tribunal's earlier cited order holding that lean gas was "a final product". He denied the benefit of Rule 57D and upheld the lower order. Hence, the appeal. 5.Heard Shri V. Sridharan, Advocate appearing along with Shri Nambirajan, Advocate for the appellants and Shri R.K. Pardeshi, DR for the Revenue. 6.When a manufacturer sets out to create a product out of certain raw materials, he not only creates the product but also creates other goods which are refuse, waste or by-product. The classification of goods into final products, by-products, waste and refuse is mainly on commercial consideration and the plan of manufacture. The scheme of Modvat credit acknowledges this. Rule 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... says the following : "However, it is found that Lean Gas, is a by-product after due manufacturing process on Natural gas to extract L.P.G." Thus both the authorities involved in these appeal proceedings had certified in the initial stage that lean gas was a by-product of processing of natural gas. Shri Sridharan showed us a feasibility report of Vaghodia plant made in July, 1990 by M/s. Engineers India Ltd. In paragraph 3.1.8 of the project description LPG is shown as the product and lean gas as the by-product. Shri Sridharan tried to impress upon the Bench that the project report was formed much earlier than the commencement of the manufacturing process. He also showed us the valuation aspect. Whereas LPG was priced at Rs. 19.80 per 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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