1977 (9) TMI 35 - CGOVT - Central Excise

Summary

Issues:
1. Interpretation of Tariff Item 14H of the Central Excise and Salt Act, 1944.
2. Determination of whether the mixture of gases known as "Wet Chlorine" falls under the definition of 'goods' within the Act.

Detailed Analysis:

Issue 1: Interpretation of Tariff Item 14H
The Central Government reviewed two appellate orders regarding the classification of a gas mixture used in the manufacturing process of Hydrochloric Acid. The Appellate Collector had ruled in favor of the party, stating that the gas did not fall under Tariff Item 14H as it was not compressed or liquified chlorine. The party argued that the gas did not meet the criteria of compressed, liquified, or solidified gases as per the Tariff. They cited the Supreme Court judgment in South Bihar Sugar Mills Limited v. Union of India to support their contention that the term 'compression' in the Tariff implied deliberate compression. The Government examined the standard for liquified chlorine set by ISI and concluded that the gas in question, driven through a pipeline under slight pressure, did not meet the definition of compressed gas as generally understood in the trade.

Issue 2: Classification of 'Wet Chlorine' as 'goods'
The party contended that the gas mixture, known as 'Wet Chlorine,' did not qualify as 'goods' under the Central Excise and Salt Act, 1944. They argued that the wet chlorine was not chlorine as per ISI specifications and was not capable of being stored or sold in containers. The Counsel presented an affidavit stating that the gas did not meet the purity requirements of chlorine gas. The Government considered the Supreme Court's ruling in D.C.M's case, emphasizing that excisable goods must be known to the trade and capable of being bought or sold in the market. They concluded that the 'Wet Chlorine' did not fulfill the criteria of being 'goods' within the Act, as it was not brought to the market for sale and posed storage challenges due to its reactive nature.

In light of the above analysis, the Central Government decided to drop the review proceedings as the 'Wet Chlorine' did not meet the criteria of compressed chlorine or qualify as 'goods' under the Central Excise and Salt Act, 1944.