Excise duty on vented gases rejected where atmospheric escape occurred during continuous manufacture and no consideration was shown.

Excise duty was held not payable on gases that escaped into the atmosphere during continuous manufacture and pipeline supply, because the venting arose from the production process and pressure management rather than a marketable removal of goods. The Tribunal relied on its earlier decision in the assessee's own matter and the Board's circular stating that gases falling under the relevant chapters, when allowed to escape into the atmosphere, are not to be treated as manufactured goods liable to duty. It also noted that the Revenue had not shown receipt of consideration for the vented gases, supporting the finding that no excise liability arose.

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Issues: Whether duty of excise was leviable on gases that escaped into the atmosphere during continuous manufacture and pipeline supply.

Analysis: The dispute concerned gases vented out because of the manufacturing technology and pressure management in the pipeline system. The Tribunal followed its earlier decision in the same assessee's case and the Board's circular clarifying that gases falling under the relevant chapters, when allowed to escape into the atmosphere, are not to be treated as manufactured goods liable to duty. It also noted that the Revenue had not shown receipt of consideration for the vented gases.

Conclusion: Duty of excise was not leviable on the gases vented into the atmosphere, and the appeal was allowed.

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