2013 (9) TMI 500 - AT - Central Excise

Cancellation of Central Excise Registration - appellant has taken centralised registration for transmission and dispensation of CNG into the vehicles. The appellant purchases natural gas from M/s. Gujarat State Petroleum Corporation Limited at entry point, Hazira and gets delivery at exit point, City Station (CGS), Ahmedabad for distribution to various filling stations at Ahmedabad. The compressed CNG at high pressure, from the stationery Cascade is transmitted into the dispenser through pipeline from where the CNG is dispensed in the vehicles. CNG is also filled in Mobile cascades mounted on the vehicle, at the online mother station and transported to various daughter stations from where CNG is filled in various vehicles through dispenser - In terms of CBEC Circular No. 875/13/2008-CX dated 16.10.2008, the measuring device should be on the compressor installed on the online station. The appellant has set up the measuring device for disposal of CNG Gas at the Dispenser in respect of online station and mass flow meter in respect of online Mother stations. As per Rule 9 of the Central Excise Rules, 2002 read with above referred CBEC Circular dated 16.10.2008, in the case CNG manufacturer, Central Excise Registration is to be given only in respect of those premises where CNG is actually manufactured i.e., where compressor is installed to convert Natural Gas into Compressed Gas (CNG), Registration is not to be given for premises where CNG is merely dispensed as submitted by the Revenue. Held that - Vide Circular No. . 875/13/2008-CX dated 16.10.2008 the Board has indicated that if the actual quantity of CNG dispensed or sold is ascertained and if the premises belonged to the same legal entity, registration can be granted - The CNG dispensed to AMTS buses at AMTS, Acher Sabarmati, AMTS, Paldi and AMTS, Memnagar are the premises which have been leased out to the appellant - Metering devises are affixed at these places for metering the exact quantity of CNG that has been dispensed to the AMTS Buses - The action of the lower authorities in cancelling the registration certificate of these places, AMTS, Acher Sabarmati, AMTS, Paldi and AMTS, Memnagar, seems to erroneous and is not sustainable Decided in favor of Assessee.

Summary

Issues:
Cancellation of Central Excise Registration for CNG stations due to absence of compressors for actual manufacturing.

Analysis:
The appellant had taken centralized registration for transmission and dispensation of CNG into vehicles. The dispute arose when it was found that certain CNG stations did not have compressors installed for converting natural gas into compressed gas (CNG) as required by the Central Excise Rules. The measuring device to ascertain the quantity of natural gas received and compressed gas manufactured was not appropriately set up at these stations, leading to a show cause notice proposing cancellation of registration under relevant provisions. The appellant argued that the stations were leased, and the dispensing of CNG was done through pipelines attached to compressors at other locations. The authorities relied on a Circular specifying that registration should only be granted where actual manufacturing takes place, i.e., where compressors are installed. The first appellate authority upheld the cancellation, leading to the appeal before the tribunal.

The tribunal examined the facts and the Circular dated 16.10.2008, which emphasized that registration should not be given to premises where CNG is merely dispensed without actual manufacturing. The Circular clarified the practice of measuring CNG production and highlighted that duty should be paid based on the quantity manufactured and removed from the factory. The tribunal noted that the CNG dispensed to AMTS buses at the disputed stations was metered accurately, and the premises were leased to the appellant. Therefore, the cancellation of registration for these stations was deemed incorrect and not in line with the Circular's provisions. The tribunal found that the actions of the lower authorities were erroneous and unsustainable, leading to the setting aside of the orders and allowing the appeal.

In conclusion, the tribunal overturned the cancellation of Central Excise Registration for the CNG stations in question, emphasizing compliance with the Circular's requirements regarding actual manufacturing and accurate measurement of CNG production. The judgment highlighted the importance of aligning registration decisions with legal provisions and ensuring proper adherence to regulatory guidelines in the context of CNG dispensation and manufacturing processes.