Central Excise - Mixture of crude gases referred to as "Lean gas" yielded during manufacture of Carbon Black - Question of excisability - Regarding - Central Excise - 35/88

Central Excise - Mixture of crude gases referred to as "Lean gas" yielded during manufacture of Carbon Black - Question of excisability - Regarding Circular No. 35/88 Dated 22-12-1988 [From F. No. 89/7/88-CX.3] Government of India Ministry of Finance (Department of Revenue) New Delhi Subject : Central Excise - Mixture of crude gases referred to as "Lean gas" yielded during manufacture of Carbon Black - Question of excisability - Regarding. A doubt has been raised regarding the excisability or otherwise of a mixture of crude gases which are referred to as 'Lean Gas', consisting of Nitrogen, Carbon-Dioxide, Water Vapour, Carbon-Monoxide and some other inert gases, generated in the course of manufacture of Carbon Black, and which are released into the atmosphere after the incineration of Carbon-monoxide content. 2. A reference in this regard has been made by the Indian Chemical Manufacturers' association. The matter has been examined by the Board. It is observed that a mixture of crude gases as mentioned above gets generated in the manufacture of Carbon Black. Carbon Black is manufactured in incomplete combustion or thermal decomposition of natural gas or petroleum oil. After the recovery of Carbon Black content, Natural gas becomes leaner, and this is precisely the reason as to why this mixture of crude gases is called 'Lean Gas'. As an anti-pollution measure, Carbon-monoxide which is a poisonous gas, is incinerated under the ground and no product is obtained out of this operation. The remaining gases are then released into the atmosphere. 3. As these gases are released into the atmosphere and do not reach the RG-1 stage, so by virtue of the second proviso of Rule 49 of the Central Excise Rules, 1944 they need not be subjected to duty of excise. Even if they are held to be excisable then by virtue of Notification No. 177/87-CE dated 30-6-1987, the gases falling under the Schedule to the Central Excise Tariff Act, 1985, are exempted from the whole of the duty of excise leviable thereon, which is specified in the said Schedule provided such gases are allowed to escape into the atmosphere by flared system or otherwise. Similarly, Lean Gas as obtained from the natural gas stands exempted by virtue of Notification No. 75/84-CE dated 1.3.1984, as amended. 4. In a nutshell, it is felt that the mixture of crude gases referred to as Lean Gas obtained in the manufacture of Carbon Black and released into the atmosphere after the incineration of carbon monoxide content need not be subject to the duty of excise. 5. Pending assessment may be finalised accordingly.