VADILAL GASES LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) Rule. Mr. R.J. Oza, learned senior standing counsel waives service of notice of rule on behalf of the respondents. Having regard to the controversy involved in the present case which lies in a very narrow compass, with the consent of the learned counsel for the respective parties, the matter was taken up for final hearing.

(2.) This petition under Article 226 of the Constitution of India is directed against the order in appeal dated 17-6-2015 passed by the Commissioner (Appeals), Central Excise, Vadodara (Annexure-K to the petition). The petitioner also seeks a direction to the respondents to consider and decide the petitioner's submission that there is no real short payment of excise duty in this case because M/s. VCL has paid excise duty on the goods in question at their selling price and further seeks a direction to the respondents to consider and verify the documentary and other evidence and decide the said issue.

(3.) The above reliefs have been prayed in the backdrop of the following facts. The petitioner company is inter alia engaged in the business of filling in cylinders, various industrial gases like Argon, Nitrogen, Hydrogen, etc. for another company viz. M/s. Vadilal Chemicals Limited. The petitioner company and M/s. Vadilal Chemicals Limited (VCL) are separate companies but belong to the same group. VCL has been purchasing the above types of industrial gases in bulk from manufacturers like Gujarat Fertilizers Ltd. The gases received from manufacturers like Gujarat Fertilizers Ltd. in tankers and skid (which is a truck/vehicle to which a system containing 152 cylinders is permanently attached by mounting such system on the backside of the vehicle); and the gases so purchased by VCL; are sold by it to the petitioner company who subjects them to purification processes and the purified gases are then filled in cylinders of 7 cubic metres capacity by the petitioner company. Under the Cenvat Credit Rules, 2004, excise duty paid on the inputs is allowed as credit while paying excise duty on the final products. Accordingly, the petitioner company has been availing of the benefit of Cenvat credit on duties paid by manufacturers like Gujarat Fertilizers Ltd. on the above industrial gases, and such credit is utilised while paying excise duty on purified gases filled in cylinders and sold by the petitioner company to VCL.