1990 (2) TMI 171 - AT - Central Excise

Summary

Issues:
- Challenge against order rejecting refund claim under Central Excises & Salt Act, 1944
- Calculation of excise duty on gas supply based on meter readings
- Point of levy of excise duty: factory gate or consumer's point
- Applicability of Central Excise Rules, 1944 and Bombay Gas Supply Act, 1939
- Interpretation of marketability of goods for excise duty assessment

Analysis:
The judgment pertains to a transferred revision petition challenging the rejection of a refund claim under the Central Excises & Salt Act, 1944. The appellant, engaged in gas generation and supply, contested the excise duty calculation based on meter readings at the factory gate. They argued that duty should be levied at the consumer's point, considering transit losses and marketability of the gas. The appellant relied on legal precedents to support their position, emphasizing the point of marketability for excise duty assessment.

The appellant contended that gas becomes "goods" only at the consumer's meter due to factors like water vapor evaporation during transit, impacting volume readings. They argued that duty should be charged at the point of marketability to align with the value of the product supplied. Additionally, the appellant highlighted the remission provision under Section 5 of the Act and relevant gas supply rules in support of their argument for duty assessment at the consumer's point.

However, the Department refuted the appellant's claims, asserting that the gas is marketable at the factory gate, as per the Central Excise Rules, 1944. The Department emphasized Rule 9, which mandates duty payment at the place of production for consumption. They argued that the gas leaving the factory for supply is deemed marketable, and transit losses do not warrant duty remission. The Department also cited a previous case to support their stance on the duty liability for gas manufacturing.

Upon deliberation, the Tribunal analyzed the duty levy point, emphasizing Rule 9 of the Central Excise Rules, 1944. The Tribunal ruled that duty must be paid at the factory gate, considering the marketability of the gas at that stage. They dismissed the appellant's argument regarding transit losses and upheld the Department's duty assessment methodology. The Tribunal found no merit in the appeal, noting the failure to raise certain grounds earlier and the lack of direct relevance of cited legal precedents to the case at hand.

In conclusion, the Tribunal upheld the Department's duty assessment at the factory gate, emphasizing the marketability of the gas at that point and dismissing the appellant's contentions regarding transit losses and duty remission. The judgment underscores the application of Central Excise Rules and the determination of duty levy based on the point of marketability for excisable goods.