1997 (8) TMI 165 - AT - Central Excise

Oxygen manufactured - Notification No. 115/95-C.E. as amended by Notification No. 127/88-C.E.

Summary

Issues:
Interpretation of Notification No. 115/75 for exemption eligibility.
Classification of industry under the Schedule to Notification No. 115/75.
Scope of amendments through Notification No. 80/86 and Notification No. 127/88.
Applicability of exemption to oxygen gas manufacturing.

Analysis:
The case involved an appeal against an order-in-appeal dated 27-8-1993, where the Collector of Central Excise (Appeals) reversed the order-in-original dated 6-2-1992 disallowing the benefit of Notification No. 115/75 to the respondent. The Collector (Appeals) held that the appellant's products, Oxygen Gas and Hydrogen Gas, were covered by the notification and should be eligible for the benefit. The appellant was engaged in manufacturing various products falling under different chapters of the Central Excise Tariff Act, including oxygen and hydrogen gas. The issue was whether the appellant's industry fell under the description "oil mill and solvent extraction industry" as per the Schedule to Notification No. 115/75. The appellant claimed the benefit of the notification, which was initially denied by the Assistant Collector but reversed by the Collector (Appeals).

When the matter was called, no one appeared for the respondent. The appellant contended that the respondent's industry did not fall under the category specified in the Schedule to Notification No. 115/75, especially after the amendments introduced by Notification No. 80/86 and Notification No. 127/88. The appellant argued that the exemption under the notification was not applicable to industries manufacturing goods falling under Tariff Item 68, which did not include oxygen. The respondent, on the other hand, claimed that their industry was engaged in manufacturing hydrogenated vegetable oil, distinct from vegetable oils specified in the notification, and therefore, should be eligible for the exemption for oxygen gas under Heading No. 28.

The Appellate Tribunal considered the submissions and clarified that the exemption under Notification No. 115/75, as amended by Notification No. 127/88, applied to all excisable goods except those under Heading Nos. 15.03 and 15.04. Since the respondents were manufacturing goods under Heading No. 15.04 and 15.08, the oxygen generated during this process was not covered by the exemption. The Tribunal emphasized that the exemption did not cover all goods manufactured in the specified industries and that the departmental clarification confirmed that the amendments were clarificatory in nature. Therefore, the Tribunal held that the respondent's claim for exemption regarding oxygen was not admissible, and the Collector (Appeals) erred in setting aside the Assistant Collector's order disallowing the benefit.

Consequently, the Departmental appeal succeeded, and the impugned order was set aside.