Excise valuation for chlorine depends on the form at deemed removal, so captive gaseous use is taxed as gaseous chlorine.

Where a notification prescribes separate tariff values for liquid and gaseous chlorine, excise duty must be assessed according to the form in which the commodity exists at the point of deemed removal or captive consumption. Chlorine in liquid and gaseous states was treated as the same goods in different forms, but the gas cleared through pipelines for captive use was assessable as dry gaseous chlorine, not as liquid chlorine. The explanation to Rule 49 of the Central Excise Rules supported this approach by deeming goods consumed within the factory to have been removed immediately before such use. The assessee's valuation claim succeeded, the contrary assessment was set aside, and refund relief followed.

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Issues: Whether chlorine in dry gaseous form, used captively in the manufacture of benzene hexachloride, was liable to duty at the tariff value applicable to liquid chlorine or at the tariff value applicable to gaseous chlorine.

Analysis: The notification in force fixed different tariff values for chlorine in liquid and gaseous forms, and such differential valuation was permissible under the statutory scheme. Liquid chlorine and gaseous chlorine were held to be the same goods in different states, not different products. When the chlorine was cleared through pipelines for captive use, it was in gaseous form, and the applicable tariff value had to be determined with reference to that form. The explanation to Rule 49 of the Central Excise Rules reinforced this conclusion by deeming excisable goods used within the factory to have been removed immediately before such consumption or utilisation.

Conclusion: The gaseous chlorine used captively was assessable at the tariff value applicable to dry gaseous chlorine, not the value applicable to liquid chlorine.

Final Conclusion: The assessee's valuation claim succeeded and the contrary assessment was set aside, with consequential refund relief directed.

Ratio Decidendi: Where a statutory notification prescribes different tariff values for different forms of the same excisable commodity, duty must be assessed according to the form in which the goods stand at the point of deemed removal or captive consumption.

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