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TMI Blog1995 (9) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant during the course of adjudication and also at the appellate stage. Rule 57D stipulates that credit in respect of inputs is allowable which may be contained in any waste, refuse or by product arising during the course of manufacture of the final product. Since there has been no manufacturing process involved, credit taken on this count is not admissible. As regards time-bar issue, there was no time-limit under Rule 57-I during the period to which the demand pertains. In view of above, the orders passed by Assistant Collector are correct and do not deserve any interference. The appeal is rejected and disposed of accordingly". 2. The facts in brief of the case are that M/s. Rajiv Company are engaged in filling compressed oxygen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The purge bottle needs to be watched as in case it gets filled up completely, it blows up the bottle. Therefore, before purge bottle is filled up completely, its valve fixed at the bottom of the bottle is released. In the process not only water escapes but oxygen gas also escapes and is lost as the valve of the purge bottle is opened every 15 to 20 minutes which causes loss of oxygen gas; that the learned Counsel submitted that the excise duty is payable and charged only on the amount of gas that is filled in the cylinder; that no duty is chargeable for the gas blown out during the process of filling of the cylinders. The learned Counsel submitted that filling of oxygen gas at a pressure of 150 kgs. per CM2 brings into existence a new ident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the process of manufacture of gas in cylinders and therefore, they were entitled to remission of duty on the gas lost in the process of manufacture. The learned Counsel also referred to Sona Metal Containers Pvt. Ltd. reported in 1995 (75) E.L.T. 941 in which the Collector (Appeals) had held that modvat credit on inputs contained only waste and scrap/processing loss is not deniable. The learned Counsel also submitted that the provision of Rule 57D of the Central Excise Rules, 1944 shall be applicable in their case. 4. The learned Counsel also submitted that period of availing credit was from Jan. 1987 to Jan. 1988 whereas the show cause notice was issued on 28th September, 1988. Thus the entire demand is hit by limitation. The learned C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d DR submitted that there was neither any waste nor refuse nor by-product which arose during the course of filling up of oxygen in gas cylinder and therefore, the question of allowing modvat credit on the inputs not accounted for does not arise. On the question of limitation, the learned DR submitted that the demand was for the period Jan. 1987 to 31-1-1988 and the show cause notice was issued on 29-8-1988; that this is prior to the amendment of Rule 57-I; that during the material, there was no limitation as to time and therefore, demand was much within the time. 6. On the question of case law cited and relied upon by the appellants, the learned DR submitted that none of the case law covers the case inasmuch the facts in the cases are dif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also referred to Rule 57D saying that loss of oxygen gas is the same as that of waste arising in the process of manufacturing and therefore, they argued that they are entitled to taking modvat credit on the quantity of gas lost. As against this, the Department s plea is that there is hardly any process of manufacture involved in filling of gas in cylinders compressing it and that loss of gas was not waste. Referring to the provisions of Rule 57D, the Department is of the view that loss and wastes are two different things and that loss is not covered by the provisions of Rule 57D. What is covered is only the waste; that there was no waste and therefore, the appellants are not helped by the provisions of Rule 57D. 8. I observe that credit o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntroversy arise whether the term `waste used in this rule can be taken to mean as loss. I observe that the word `waste used in this rule has a specific meaning that a part of input should be contained in the waste. Now loss is entirely a different phenomenon. In the case of filling compressed oxygen in oxygen cylinder, there is no waste, it is a total loss. I also observe that remission of duty has been claimed on this loss. In this case, oxygen was cleared as such on payment of duty and loss of oxygen has taken place after payment of duty and therefore, remission of duty on this oxygen is not admissible. Further I find that it has been claimed that this loss has occurred in the process of manufacture of compressed oxygen gas and hence mo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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