9911796707
TMI Blog1983 (12) TMI 279X X X X Extracts X X X X X X X X Extracts X X X X ..... period February, 1975 to May, 1977 as the Central Excise authorities said that the condensate was used as a motor spirit and, therefore, should pay Central Excise duty under Item 6 of the Central Excise Tariff. The Appellate Collector held that considering all the characteristics of the condensate, its source and its behaviour, it satisfies the definition of motor spirit in all respects and, therefore, the assessment and demand of duty was correct. 3. It is necessary to state briefly the manner in which the condensate is obtained. The crude oil which is lifted from the well goes into a separator which separates the crude oil from the associated gas. In the separator the crude oil is separated from the lighter hydrocarbon, in this case th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sure. But if it is to be called a mineral oil then it is a crude oil and in fact comes out of the well together with the crude oil. The CHC obtained from the condensed gas cannot be regarded as a mineral oil; on the other hand since it is more easily identified as a crude mineral oil, it is not excisable at all. 5. Simply because the oil has a flashing point below 76oF it is not classifiable under Tariff Item 6. It should also be by itself or in admixture with any other substances, be suitable for use as a fuel for internal combustion engines. There has been no finding that it is so suitable. The condensate either by itself or in admixture with any other substance is not suitable for use as a fuel for internal combustion engine. It does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e oil. There can be no doubt that it is a mineral oil because it is obtained as a mineral when it is brought up from the well together with the crude petroleum. They had used the oil without any damage to the engines for two years and had it not been by the Central Excise demanding duty, the use would have continued and there is no sign that they would have stopped this use because of any reason connected with the unsuitability of the oil. Motor spirit has been defined in Item 6 of the Central Excise Tariff and, therefore, there is no need to look for any other definitions. The test report showed that the oil had a flash point of below 76oF and this had not been challenged at any time and, therefore, it remained valid and uncontroverted. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing crude mineral oil) which as its flashing point below seventy-six degrees of Fahrenheit s thermometer, and which, either by itself or in admixture with any other substance, is suitable for use as fuel for internal combustion engines; and (ii) power alcohol, that is to say, ethyl alcohol, of any grade (including such alcohol when denatured or otherwise treated) which, either by itself or in admixture with any other substance, is suitable for being used as aforesaid. Explanation I - Mineral oil means an oil consisting of a single liquid hydrocarbon or a liquid mixture of hydrocarbons (except for associated impurities) derived from petroleum, coal, shale, peat or any other bituminous substance and includes similar oil produced by sy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvince any one that it was not crude. And no one can seriously doubt that it was a mineral oil, having been obtained the way it was. 9. During the arguments the learned Counsel for the appellants was asked whether the engines in which the condensate was used to drive were internal combustion engines and he affirmed that they were. The principle of an internal combustion engine, as the name implies, is that the motive power is provided by the combustion of the fuel inside the engine in cylinders. This combustion leads to rapid expansion of the burnt fuel which in turn pushes a cylinder to push a shaft called a crankshaft which turns a wheel. The principle of all internal combustion engines, with slight variations in mechanical details, ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en sufficient attention to all the authorities quoted by the Assam Oil Co. to argue that the condensate was not goods or that since it was not removed it would not be excisable or that it was not marketable or was not understood to be marketable goods and all other rulings. But the quotations are largely irrelevant. For one thing it must be remembered that Rules 9 and 49 were amended in 1982 so as to make goods liable to duty even if they are not removed. These amendments took retrospective effect from 1944 and are deemed to have been co-eval with the Central Excise Rules. The Assam Oil Co. claimed that the goods are not marketable and they are not known as motor spirit. They overlook the fact that the goods were not marketable simply becau ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
