Gas-based intermediate products exemption covers process-generated non-gaseous products, so Solvex-GL qualified for refund.

An exemption entry for gas-based intermediate products was construed by reference to the production process, not to whether the product remained gaseous at standard conditions. Solvex-GL, produced during the manufacture of LPG from processed natural gas, was treated as covered by Serial No. 13(i) of Notification No. 33/99-CE because the entry extended to intermediate products generated in that process, including non-gaseous forms. The distinction between gas and liquid character was rejected, and the refund granted to the respondent was upheld.

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Issues: Whether Solvex-GL was covered by Serial No. 13(i) of Notification No. 33/99-CE dated 08.07.1999 as a gas-based intermediate product and whether the refund granted to the respondent was sustainable.

Analysis: The notification granted refund-linked exemption to goods specified in the schedule and Serial No. 13 dealt with gas-based intermediate products. The entry was read as covering not merely products that remain gaseous at standard conditions, but products emerging in the course of exploration and production of gas-based products. On the undisputed manufacturing process, Solvex-GL arose during production of LPG from processed natural gas. The presence of other non-gaseous items in the same serial showed that the entry was not confined to substances remaining in gaseous form. The distinction sought to be drawn between gas and liquid forms was therefore rejected, and the notification was held to cover the impugned product.

Conclusion: Solvex-GL was held to fall within the exemption and the refund in favour of the respondent was upheld.

Ratio Decidendi: An exemption entry describing gas-based intermediate products must be construed with reference to the process of production and includes intermediate or final products generated in that process, even if such products are not gaseous at standard conditions.

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