9911796707
TMI Blog1995 (9) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 in cylinder. For this purposes, they received oxygen gas from M/s. National Fertilizers Ltd. On scrutiny of the record of the appellant company, the Central Excise Authorities found that there was no account of 142364.600 CM3 of oxygen gas on which they had taken modvat credit of Rs. 42,709.38 during the period from Jan. 1987 to Jan. 1988. Accordingly, the appellants were asked to show cause as to why the amount of Rs. 42,709.38 should not be recovered from them under Rule 57-I of the Central Excise Rules, 1944. 3. Shri Amrik Singh, the learned Advocate appearing for the appellants submitted that the gas is manufactured by M/s. National Fertilizers Ltd. The gas was measured when it was passed through a mechanical meter and payment for supply of the gas was made according to the readings of the meter. A blower was installed near mechanical meter. This blow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... line and the oxygen gas filled after the compression in gas cylinder and therefore, filling oxygen gas after compressing into gas cylinder should be treated as a process of manufacture. The ld. Counsel also referred to the decision of the Tribunal in the case of Jagatjit Industries Ltd. reported in 1991 (54) E.L.T. 380 wherein this Tribunal had held there is no provision to bar remission for loss due to natural causes. The Learned Counsel submitted that loss of oxygen gas is in 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts did not keep any record of the alleged loss of gas stage-wise and therefore, submitted that the lower authorities have rightly disallowed the modvat credit on the quantity of gas not accounted for. 7. Heard the submissions of both sides. I find that in the instant case, the modvat credit on the gas coming through the pipeline was being taken on the basis of the quantity shown by the mechanical meter installed at the factory of the manufacturer of oxygen gas. In the process according to the appellants, there were loss at various stages before this oxygen gas was filled in gas cylinder as compressed oxygen gas. The appellants adduced two pleas namely that the process of filling gas in gas cylinder was a process incidental or ancillary to the completion of the finished product namely the compressed oxygen gas. 7A. On the ratio of decisions cited and relied upon by the appellants, I find that the facts in those cases are different from the facts of the case before me insofar as the question of manufacture is concerned. On the question of claim of loss of oxygen gas in the process because of natural causes or because of being lost in the process of manufacture and theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arising during the manufacture of final product etc. A lot of controversy 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 modvat credit taken in respect of oxygen gas lost should not be varied. I find that loss and waste are two different and distinct terms for the purpose of Rule 57D whereas waste has been covered, loss is not covered by Rule 57D. Having regard to the fact that there is a specific provision in the relevant Rules (Rule 57D) regarding waste, refuse, etc. and there is no provision for loss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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