1983 (4) TMI 172 - AT - Central Excise

Summary

Issues: Determination of tariff value for Chlorine in dry gaseous form used in the manufacture of BHC (Tech.) and the applicability of different values for Chlorine in liquid and gaseous form.

Detailed Analysis:

The case involved a revision application to the Government of India, treated as an appeal before the Appellate Tribunal CEGAT, New Delhi, under Section 35P(2) of the Central Excises and Salt Act, 1944. The appellants produced Chlorine gas through electrolysis of Sodium Chloride, which required purification to remove impurities before being used in the manufacture of Benzene Hexachloride (Technical). The dispute arose from the different tariff values fixed for Chlorine (Liquid) and dry Chlorine in gaseous form. The authorities initially provisionally assessed the duty on dry gaseous Chlorine at the rate applicable to liquid Chlorine. The Assistant Collector and Appellate Collector of Central Excise rejected the appellants' claim based on the premise that there cannot be two tariff values for the same product.

During the hearing, it was argued that the Notification itself allowed for different values for Chlorine in liquid and gaseous form, as permitted under sub-section (3) of Section 3 of the Central Excises & Salt Act, 1944. The Tribunal noted that when liquid Chlorine transformed into dry gaseous Chlorine, the goods remained the same, only the form changed. Therefore, the tariff value applicable to the form at the time of removal should be used for duty determination. The Explanation to Rule 49 of the Central Excise Rules supported this view, stating that goods consumed in a factory for the manufacture of another commodity should be deemed removed at the point of consumption. In this case, Chlorine was in gaseous form when utilized, and thus, the tariff value should relate to this form.

Consequently, the Tribunal allowed the appeal, setting aside the tariff value for Chlorine in dry gaseous form as that of liquid Chlorine. The authorities' decision was overturned, and the appellants were entitled to a refund, if applicable, within two months of the order's communication.