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TMI Blog2003 (10) TMI 425X X X X Extracts X X X X X X X X Extracts X X X X ..... vat credit of duty paid on Butane under Rule 57A of the Central Excise Rules, 1944. 2. Shri V. Lakshmikumaran, learned Advocate, submitted that appellants manufacture Liquefied Petroleum Gas (LPG in short) and avail of Modvat credit of the duty paid on inputs; that natural gas is received from M/s. ONGC through HBJ pipeline which is processed for extraction of LPG (C3 and C4 approximately 50 : 50); that the said natural gas contains more Propane (C3) that Butane (C4); that the quantity of Propane not utilised in the manufacture of LPG at the first instance is subsequently mixed with Butane which they receive from Oil Companies for manufacture of LPG; that taking into account the quantum of LPG manufactured, required quantity of Mercaptum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eous under normal atmosphere conditions. The chief constituents of LPG are Propane, Propylene, butane, butylene, and iso-butane. 3.2 In Britannica, the term LPG is defined as under :- Liquefied Petroleum Gas, also called LP Gas or LPG, any of several liquid mixtures of the Volatile hydrocarbons, propane, butane and butane. A typical commercial mixture may also contain ethane and ethylene as well as a volatile mercaptan, an odorant added as a safety precaution. 3.3.1 The learned Advocate mentioned that in Kirk-Othmer Encyclopaedia of Chemical Technology LPG is defined as a mixture of butane and propane, typically in a ratio of 60 : 40 butane-propane; that as per Liquefied Petroleum Gas (Regulation and Supply and Distribution) Order, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter. (ii) In Vijaya Packers v. CCE, Cochin, 1994 (71) E.L.T. 254 (T) it has been held that process of sifting and blending dextrose monohydrated with tricalcium Phosphate and Vitamin D results into a new product Glucovita Gulucon D. (iii) Collector of Customs, Madras v. Air Control Systems, 1988 (33) E.L.T. 568 (T) wherein blending of sodium hexametaphosphate with tephguard has been held to amounting to manufacture. (iv) Brooke Bond India Ltd. v. U.O.I., 1984 (15) E.L.T. 32 (A.P.). 5. He also mentioned that classification of butane and propane is dependent on their purity; that the product of higher purity is considered as different from product of lesser purity; that for example propane of lesser purity is identif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent appeal is not the Cooking gas used in the Indian houses but whether mixing of Propane and Butane amounts to manufacture; that Propane and Butane are known as Liquefied Petroleum Gas. He referred to the Book Gas Processing - Environmental Aspects and Methods by James G. Speight wherein it is mentioned that originally, the gas processing plants were used to remove the gasoline components to be used as a blending stock for motor gasoline and other fuel needs then caused a shift of focus to the liquefied petroleum gas (Propane Butane and/or mixture thereof) as well as the gasoline constituents. He, therefore, contended that Propane and Butane independently are known as LPG and the LPG obtained by the Appellant is a mixture of two LPGs an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lace, Butane cannot be termed as an input and accordingly Modvat credit of the duty paid on Butane has been correctly disallowed. 8. We have considered the submissions of both the sides. The entire case of the Revenue rests on the premises that both Propane and Butane are by themselves Liquefied Petroleum Gas and, therefore, mixing of these two gases does not bring into existence a new and different article as the resultant product is also known as Liquefied Petroleum Gas. The facts which have not been disputed by the Revenue are that Propane obtained by processing of natural gas is mixed with duty paid Butane obtained by the appellants from oil companies to make Liquefied Petroleum Gas. It is also not the case of Revenue that LPG is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Brooke Bond India case the High Court has held that blending of coffee powder with chicory amounts to manufacture as the mixing and blending of Coffee Powder and Chicory constitute the process of manufacture as defined in Section 2(f) of the Central Excise Act. The High Court has further held that the product thus obtained known as Coffee - Chicory blend in the business market is a distinct commercial commodity. The High Court rejected the contention of the Appellant that there would be double taxation both on coffee and also the mixture of coffee and chicory. We are thus of the view that the process of mixing of propane and butane undertaken by them to get Liquefied Petroleum Gas amounts to manufacture. Once the activity undertaken by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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