Excise duty on gas attaches at factory removal, and transit loss alone does not justify remission or refund.

Excise duty on gas was chargeable on the quantity removed from the factory gate under Rule 9 of the Central Excise Rules, 1944, because duty attached at the time of removal for consumption outside the place of production. The supply regulations governing distribution did not alter the incidence of excise duty or shift the point of levy to the consumers' meter. Pipeline loss during transit was not treated as a basis for remission under Section 5 of the Central Excises & Salt Act, 1944, and no legal ground for refund was established. Duty was therefore assessable on the factory-gate quantity, with no remission or refund for transit loss.

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Issues: Whether excise duty on gas was payable on the quantity recorded at the factory gate or on the reduced quantity recorded at the consumers' meter, and whether loss of gas during transit entitled the assessee to remission or refund of duty.

Analysis: Rule 9 of the Central Excise Rules, 1944 required duty to be paid before removal of excisable goods from the place of production for consumption outside that place. The supply regulations relied upon by the assessee governed safe distribution and did not control the incidence of excise duty. The fact that gas was carried through mains to consumers did not shift the point of levy away from removal from the factory. The loss occurring in the pipeline was not treated as a basis for remission under Section 5 of the Central Excises & Salt Act, 1944, and the assessee had not established a legal ground for refund on that basis.

Conclusion: Duty was correctly assessable on the quantity of gas at the factory gate, and no remission or refund was admissible for transit loss. The issue was decided against the assessee.

Ratio Decidendi: Under Rule 9, excise duty is chargeable at the time and place of removal from the factory, and transit loss after removal does not by itself entitle the assessee to remission or refund.

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