2017 (6) TMI 102 - AT - Central Excise

Levy of tax - some quantities of gases sent through pipeline to the recipient was vented out into atmosphere - Held that - the same issue pertaining to the very same appellant for an earlier period had come up before this Tribunal wherein the issue was decided in favour of the respondent in the case of CCE, Belgaum Versus M/s. Jindal Praxair Oxygen Co. (P) Ltd. 2012 (8) TMI 825 - CESTAT BANGALORE , where it was held that gases which were vented out in the atmosphere are exempted from excise duty - demand set aside - appeal allowed - decided in favor of appellant.

Summary

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

Analysis:
The appeal was filed against the Order-in-Original demanding excise duty on gases vented out into the atmosphere during the course of manufacturing various gases like Oxygen, Nitrogen, and Argon. The appellant cleared these gases through a pipeline to a recipient for maintenance purposes. The Department issued a show-cause notice demanding excise duty amounting to &8377; 8,98,95,927/- from the appellant. However, the impugned order set aside the duty demands, leading to the appellant's appeal.

During the proceedings, it was highlighted that a similar issue concerning the same appellant had previously been decided in favor of the respondent by the Tribunal. The earlier decision emphasized the unique technological constraints faced by the appellant in allowing some gases to escape into the air to prevent pipeline damage due to pressure accumulation. Citing a relevant Board's Circular, it was clarified that gases vented out into the atmosphere were exempt from excise duty, especially when no consideration was received for them. The Department had accepted this decision, and in line with the precedent, the impugned orders were sustained, and the appeals were dismissed.

In conclusion, the Tribunal upheld the impugned order based on the earlier decision and the Board's Circular exempting gases vented out into the atmosphere from excise duty. The appeal filed by the appellant was allowed, maintaining consistency with the previous ruling.