Oxygen gas exemption under Notification No. 40/85 failed where castings were finally classified under other tariff chapters.

Notification No. 40/85 applied only where oxygen gas was used in the manufacture of castings falling under Chapters 72 or 73 of the Central Excise Tariff Act, 1985. The castings in question had already been classified under Chapters 84, 85, 86 and 87 on the basis that they had acquired the essential characteristics of machine parts and mechanical appliances. That classification had attained finality, so the notification's eligibility condition was not met. The benefit of the notification was therefore denied.

---

---

Issues: Whether oxygen gas used in the manufacture of castings was eligible for the benefit of Notification No. 40/85 when the castings stood classified under Chapters 84, 85, 86 and 87 and that classification had attained finality.

Analysis: The notification extended relief only to oxygen gas used in the manufacture of castings falling under Chapters 72 or 73 of the Central Excise Tariff Act, 1985. The castings manufactured by the appellants had already been classified under other chapters on the basis that they had acquired the essential characteristics of machine parts and mechanical appliances. Since the classification was not in dispute and had become final, the eligibility condition in the notification was not satisfied.

Conclusion: The benefit of Notification No. 40/85 was rightly denied and the issue was decided against the assessee.

---