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Issues: Whether oxygen gas captively consumed by the assessee was entitled to exemption under Notification No. 224/75, and whether the quantity sold to third parties was to be valued on the basis of the sale price.
Analysis: The assessee did not press the valuation dispute on merits and relied on the exemption notification for the oxygen gas captively consumed. The Tribunal followed the course adopted in an earlier matter involving the same notification and held that the proper course was to determine the quantity of oxygen gas captively consumed for the purpose of the exemption. For the quantity sold to others, the sale price was accepted as the basis for valuation.
Conclusion: The impugned order was set aside and the matter was remanded to the adjudicating authority to determine the quantity of captively consumed oxygen gas eligible for exemption under Notification No. 224/75. To that extent, no differential duty was payable, and the sale price would govern the value of oxygen gas sold to others.
Final Conclusion: The assessee obtained partial relief by securing reconsideration of exemption eligibility for captive consumption, while the valuation basis for sales to third parties was maintained.
Ratio Decidendi: Where a captive-consumption exemption depends on the actual use of goods, the adjudicating authority must first determine the eligible quantity before duty liability can be fixed.
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