2017 (5) TMI 1380 - AT - Central Excise

Levy of duty - The respondent is engaged in the manufacture of various gases such as Oxygen, Nitrogen, Argon etc. - Due to technical reasons, some quantities of such gases sent through pipeline to the recipient was vented out into atmosphere. The Department wanted to levy duty of excise on such quantities of gases - Held that - the same issue pertaining to the very same appellant for an earlier period 2012 (8) TMI 825 - CESTAT BANGALORE had come up before this Tribunal wherein the issue was decided in favour of the respondent. It was held that gases which were vented out in the atmosphere are exempted from excise duty - duty not leviable - appeal dismissed - decided against Revenue.

Summary

Issues:
Levy of excise duty on gases vented out into the atmosphere.

Analysis:
The appeal was filed by the Revenue against an Order-in-Appeal where excise duty amounting to ? 63,80,700/- was demanded from the respondent, engaged in the manufacture of various gases. The gases produced were cleared through a pipeline to a recipient, who used them for plant and equipment maintenance. However, due to technical reasons, some quantities of gases sent through the pipeline were vented out into the atmosphere. The Department sought to levy excise duty on these vented gases. The impugned order held that such duty demands were not sustainable and set them aside, leading to the appeal by the Department.

During the hearing, it was noted that a similar issue had been decided in favor of the respondent by the Tribunal in an earlier period. The Tribunal's earlier decision highlighted that gases vented out due to technical constraints were not liable for excise duty based on a Board's Circular exempting gases allowed to escape in the atmosphere. The Revenue failed to show evidence that the appellants received any consideration for the vented gases. The Department had accepted the earlier decision, and based on the cited precedent, the Tribunal upheld the impugned order and dismissed the appeal filed by the Revenue.

In conclusion, the Tribunal, following the precedent set in the earlier decision, found no grounds to interfere with the impugned order. The appeal by the Revenue was consequently dismissed.