ORDER
V.K. Jain, Member (T)
1. The captioned three appeals arise out of a common Order-in-Appeal Nos. 550-52-CE/DLH/2002, dated 10-10-2002. The Commissioner has confirmed the duty amount of Rs. 2,05,216.00 (Rupees two lakh five thousand two hundred and sixteen), and imposed a penalty of Rs. 1.00 lakh (Rupees one lakh) upon the appellants by denying the benefit of Notification No. 67/95-C.E., dated 16-3-95, The said Notification allows the benefit of inputs which are used captively in the further manufacture of final products. The same was denied to the appellants in respect of Gases which are allowed to escape in the atmosphere by flashing and cleaning the pipelines when the new Gas is to be produced. The appellants’ contention is that such flushing of the Gas in the atmosphere amounts to use of the same captively, inasmuch as it is out of the technical necessity that such Gases are required to be flushed out before a new type of Gas starts being manufactured by them. The appellants have contended that benefit of Notification No. 67/95-CE. is available to them.
2. Shri B.J. Mookherjee, learned Advocate for the appellants has also drawn our attention to the Board’s Circular No. 246/80/96-CX., dated 1-1-96. He also places reliance on the following judgments :-
(i) Triveni Engg. Industries Ltd. v. Commissioner of C. Ex., Meerut reported in 1999 (105) E.L.T. 427 (Tribunal); (ii) J.K. Cotton Spg. and Wvg. Mills Co. Ltd. v. Sales Tax Officer, Kanpur reported in 1997 (91) E.L.T. 34 (S.C.); (iii) Bharat Pumps and Compressors Ltd. v. C.C.Ex., Allahabad reported in 2002 (53) RLT 290 (CEGAT-Del.); and (iv) Jabirua Chemicals and Industries Limited v. C.C.Ex., Allahabad reported in 1998 (29) RLT 901 (CEGAT).
3. Countering the arguments, Shri N.K. Mishra, learned JDR for the Revenue has relied upon the observations made by the Commissioner (Appeals) vide which it was held that flushing out of the previous gas in the atmosphere does not amount to use of the same captively. The Commissioner (Appeals) has observed that inasmuch as the said gas was itself a final product used in the maintenance/cleaning of their equipments and containers (cylinders), the same cannot be held to be used captively. Learned JDR has also distinguished the cases cited by the appellants’ advocate that they are not applicable in this case. He also submits that the Board’s Circular relied upon by the appellants does not deal with a situation where gases produced by a manufacturer are used for said purposes and simply dealt with a situation where gases as such are allowed to escape in the atmosphere by flare system or otherwise, obviously without using it for the purposes like that in this case of the appellants. He also drew our attention to the Commissioner (Appeals) Order where the appellants were claiming exemption of duty earlier to September, 1997 in respect of use of Gases for said purposes, which was the right decision in their part in view of the legal status as held by the Commissioner (Appeals). Shri B.J. Mookherjee, learned Advocate for the appellants submits that the appellants’ final product is Gas filled in cylinders and as such, the appellate authority was not justified in observing that the Oxygen Gas is allowed to escape in the atmosphere in the final product itself.
4. We have heard both sides. We note that Notification No. 67/95-C.E. extends the exemption in respect of the products which are used captively in the manufacture of other final product in the appellants’ factory. The Gas which is allowed to escape in the atmosphere is not further used in the manufacture of any other item. The appellants’ contention that the said escape of the Gas in the atmosphere amounts to captive consumption of the same in the further manufacture of the Gas filled in the cylinders, does not appear to be correct. As pointed out by the learned JDR, the judgments quoted by the learned Advocate, are distinguishable in the present cases. They are in a different set of facts and circumstances. The Board’s Circular relied upon by the appellants is also not applicable to them, as rightly observed by the Commissioner (Appeals).
5. In view of the above, we hold that exemption to Notification No. 67/95-C.E., dated 16-3-95 is not available to the appellants. We do not find force in the appeals meriting relief sought for by the appellants. We accordingly dismiss the above three appeals by upholding the Order of the Commissioner (Appeals).