9911796707
TMI Blog1997 (7) TMI 396X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.11 of the Schedule to the Central Excise Tariff Act, 1985. For the better appreciation of the facts, it is necessary to refer to the manufacturing process as given by the appellants in their memo of appeal and as reflected in the flow chart annexed by the appellants with the said Appeal. From the atmospheric air, the appellants first manufacture compress air which is dutiable commodity covered by Heading No. 28.51 of the Central Excise Tariff. From the compressed air, liquified air is manufactured which is also excisable under Heading No. 28.51. Liquid oxygen is further manufactured from the liquified air during the said process. Nitrogen gas is also generated which is allowed to be escaped into the atmosphere. The liquid oxygen so manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accumulated credit towards payment of duty on their final product. 3. The dispute in the present proceeding relates to the payment of duty on the appellants final product made through RG 23A Part II. The department has denied the Modvat credit to the appellants to the extent of Rs. 1,16,352.43 so utilized by them during the period July, 1990 to February, 1991 on the ground that along with boughtout liquid oxygen, the appellants were also utilising their own manufactured liquid oxygen on which no duty was paid by them and as such the `oxygen gas in cylinders manufactured from their own plant liquid oxygen should have been cleared on payment of duty through their PLA. As per the appellants, they were using plant made liquid oxygen as well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as required to be cleared by the appellants on payment of duty from PLA. Appeal against the above order of the Assistant Collector did not succeed before the Collector (Appeals). Hence the present Appeal. 4. Arguing on the Appeal, Shri J.P. Khaitan, ld. Advocate drew the attention of the Bench to the entire sequence of the facts resulting in accumulation of credit on account of placing of embargo on the appellants by the department. He submitted that as a result of embargo placed by the department, they could not utilised the Modvat credit on the duty paid liquid oxygen utilised by them in the manufacture of their final product and resultantly had to pay the duty out of PLA. Subsequently, when the embargo was lifted by the department ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tariff. He also submitted that the demand in question is barred by limitation of six months inasmuch as there is no suppression or mis-statement on their part. The department was aware of the practice being followed by them of the RT 12 return were being regularly filed by them. This question of limitation, is being agitated by them right from the start of the proceeding and the ld. Collector (Appeals) has wrongly observed in his impugned order that the plea of limitation was not raised before the authorities below. In support of his submissions, he relied upon a number of decisions of the Tribunal. In the circumstances, he pleaded for allowing the Appeal. 5. Countering the arguments of the ld. Advocate, ld. JDR, Shri R.K. Roy submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placed on record, I find that the manufacture of liquid oxygen is a full fledge process which includes the production of compress air and liquified air during the intermediate stages. These compressed and liquified air are excisable commodities classifiable under Chapter Heading 28.51 of the Tarif. From this liquified air, liquid oxygen is manufactured and from this liquid oxygen, `oxygen in cylinder is manufactured. As such, it cannot, therefore be said that `oxygen in cylinder is made directly from the air. The same is held to be manufactured out of liquid oxygen which is an independent excisable commodity as is also evident from the fact that the appellants are buying the same from out side on payment of duty. Having held so, I now pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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