CCE Vs. BOC (INDIA) PVT. LTD.

JUDGEMENT

(1.) BOC (India) Ltd. was engaged in the compressing and filling in cylinders medical and industrial grade oxygen and argon. The process was being treated as one of manufacture. The assessee paid duty on the cylinders that it filled with liquefied gas and utilised as credit duty paid on the gases that it received. Notice issued to it proposed to recover credit taken on quantities of these gases which escaped into the atmosphere during the process of filling in the cylinder on the ground that the goods were not used in the manufacture of the final product. The Asst. Commissioner confirmed the liability to reversal of the credit and imposed penalty on the assessee. The Commissioner (Appeals) allowed the appeal against this order on his view that the escaped gases were in the nature of waste and hence to be covered by the provisions of Rule 57D. Hence this appeal by the Commissioner.

(2.) THE Commissioner Appeals) has relied upon the unreported decision of the Tribunal, holding in the case of the same assessee that such escaped gases would be waste within the meaning of Rule 57D. He says that his decision has taken into account the earlier decision of the Tribunal in Rajiv and Co. v. CCE in which the single member has held that oxygen lost during filling of cylinder is not waste. The ground in the appeal, that this order of the Tribunal has not been accepted is itself totally unacceptable. The Commissioner does not have any option not to act upon the decision of the Tribunal merely because an appeal has been filed against it. It has not been shown that the order of the Tribunal has been set aside. That alone should be enough to dismiss the appeal. For the sake of completeness I will deal with the other two decisions that have been relied upon.

(3.) IN Adhesive and Chemicals v. CCE a single member of this Tribunal has held to be inapplicable the provisions of Rule 57D to cases of loss by means of evaporation during storage on the ground that the loss did not occur in the process of manufacture and occurred before that process commenced. That decision clearly does not apply to the facts before me. There is no dispute that the loss occured during filling of the cylinders. In Gujarat Chemicals Pvt. Ltd. v. CCE a single member of this Tribunal has held that sulphuric acid that was spilt on the factory flooring in the course of manufacture of detergent was not waste covered by provision of Rule 57D. He said that Rule 57D only applies to waste, residue and byproduct that has physical existence and will not apply to goods which are lost by means of spillage or evaporation.