Oil cess on natural gas condensate was held inapplicable, and the demand was also found time barred.

Condensate emerging during natural gas processing was held outside the levy of oil cess and allied duties because it is not crude oil within the scope of the charging provision under Section 15 of the Oil Industry (Development) Act, 1974. The Tribunal followed its earlier ruling in the assessee's own case and treated the by-product as not covered by implication. It also accepted the limitation objection, noting that the demand was raised without invocation of the extended period and was therefore time barred.

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Issues: Whether oil cess and allied duties were leviable on condensate emerging during processing of natural gas, and whether the demand was barred by limitation.

Analysis: The Tribunal followed its earlier decision in the assessee's own case and reiterated that condensate obtained during processing of natural gas is not crude oil for the purpose of levy under the Oil Industry (Development) Act, 1974. The charging provision under Section 15 was held to apply only to the specified items, and condensate, being a by-product arising during gas processing, could not be brought within the levy by implication. The Tribunal also accepted the limitation objection, noting that the demand had been raised without invocation of the extended period and was therefore time barred.

Conclusion: Oil cess and the connected demand were not leviable on condensate, and the demand was also barred by limitation.

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