ORDER S.P. Bharucha and S.B. Majmudar, JJ.
1. These are appeals that arise out of an order of the Customs, Excise and Gold (Control) Appellate Tribunal.
2. No detailed discussion of facts is necessary for reasons which will become apparent. The appellants manufacture iron and steel. For that purpose they require oxygen gas. They make the oxygen gas themselves. Of the oxygen gas made by the appellants, 99.998% is captively consumed as aforesaid. In this respect the appellants declared the value of 100 cubic meters of the oxygen gas at Rs. 23.21, being the cost of production. The balance .002 per cent was used by the appellants' contractors working in their plant, to whom the appellants charged the rate of Rs. 325/- per hundred cubic meters. The Excise authorities issued to the appellants a notice proposing to assess the value of the 99.998 per cent of the oxygen gas captively used also at the rate of Rs. 325/- per hundred cubic meters, and did so. The Tribunal upheld the stand of the Excise authorities, and it is against that order of the Tribunal that these appeals are filed.
3. At the stage when notice or these appeals was issued, particular reference was made to the ground that related to an Exemption notification under Rule 8(1) of the Central Excise Rules, 1944, which exempted altogether from Excise duty oxygen gas intended for use in the manufacture of iron in any crude form, steel ingots and iron or steel products falling under Item Nos. 25, 26 and 26AA of the First Schedule, provided that the Assistant Collector of Central Excise was satisfied that the oxygen gas had been so used. The appeal was admitted and there was a stay of recovery of the differential duty on the oxygen gas captively consumed.
4. The principal argument is based upon the Exemption notification. It is not in dispute that the appellants manufacture the items set out in the Exemption notification falling within the entries of the Tariff thereon stated. The appellants have, however, to satisfy the Assistant Collector of Central Excise that the oxygen gas had been used for the purpose set out in the Exemption notification.
5. It, therefore, becomes necessary to set aside the order under appeal and remand the matters to the Assistant Collector of Central Excise to determine what quantity of oxygen gas had been captively consumed, in respect of which the benefit of the Exemption notification shall be available to the appellants. To the extent, that it is available, no differential duty shall be payable.
6. Having regard to what has transpired, it becomes unnecessary to go into the question of the valuation at the rate of Rs. 325/- per hundred cubic meters. That question will remain open, should it be necessary to raise it.
7. The Civil Appeals are disposed of accordingly.
8. There shall be no order as to costs.