Central Excise - Classification of sniff gas for Central Excise purpose - Doubt regarding - Central Excise - 2/88

Central Excise - Classification of sniff gas for Central Excise purpose - Doubt regarding Circular No. 2/88 Dated 21-3-1988 [From F. No. 105/1/88-CX.3] Government of India Ministry of Finance (Department of Revenue) New Delhi Subject : Central Excise - Classification of sniff gas for Central Excise purpose - Doubt regarding . A doubt has been raised as to whether 'sniff gas' could be treated as excisable. 2. The matter has been examined. It is seen that the Board had, vide their Tariff Advice No. 65/73, dated 28-4-1973 (F. No. 105/4/72-CX.3, dated 28-4-1973), clarified that sniff gas is known as waste gas and is stated to be an effluent produced during the manufacture of liquid chlorine and it contains non-condensable gaseous impurities. It was clarified by the above mentioned Tariff Advice that sniff gas would not be classifiable as "compressed, liquified or solidified chlorine gas" under the then TI 14H of CET, notwithstanding the fact that it contains certain percentage of chlorine". As there was no residuary tariff item like TI 68 at that time, the sniff gas was treated to be non-excisable. With the introduction of residuary TI 68 from 1-3-1975, it was generally believed that sniff gas would be classifiable under TI 68 and would remain exempt, when captively consumed, in terms of notification No. 118/74 -C.E., dated 30-4-1975, as amended. No further Tariff Advice had been issued stating that sniff gas would remain non-excisable notwithstanding the introduction of TI 68 w.e.f. 1-3-1975. With the introduction of new C.E.T. w.e.f. 28-2-1986 and the consequent abolition of notification No. 118/75-CE dated 30-4-1975, a question has arisen as to whether such sniff gas could be treated as excisable and classifiable under Chapter 28 of the new CET. 3. On examination of the matter, it is observed that sniff gas was treated to be classifiable, under TI 68 of the old CET w.e.f. 1-3-1975, simply because no tariff advice had been issued after 1-3-1975 stating that sniff gas could be treated as non-excisable inspite of the introduction of TI 68. The view taken in Board's Tariff advice No. 65/73, dated 28-4-1973 was that sniff gas is a waste gas. This view had not been changed subsequently through any other Tariff Advice or instructions. 4. While examining the question of excisability and classification of sniff gas afresh, the Dy. Chief Chemist, C.R.C.L., New Delhi has been consulted. The Dy. Chief Chemist, has opined that sniff gas is a 'waste' and not a 'goods' such sniff gas is also reported to be incapable of being sold. 5. In view of above, the Board is of view that sniff gas is not 'goods' and hence not excisable. 6. All pending assessments may be finalised on the above basis. 7. The trade interests' may be suitably advised