Pipeline-supplied oxygen falls under the tariff entry, with marketability upheld and no natural justice breach found.

Oxygen moved through a pipeline within the manufacturer's factory was treated as oxygen supplied through pipeline under tariff entry 2804.12, because the entry did not require supply to an external purchaser and only required movement through a pipeline to a point different from the point of origin. Marketability was also found established, with comparable pipeline supplies by other manufacturers supporting that conclusion. Reliance on such material did not breach natural justice because the factual basis had emerged during the hearing and the assessee was not taken by surprise. The refund claim therefore could not be sustained.

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Issues: (i) Whether oxygen carried through a pipeline within the manufacturer's factory fell within tariff entry 2804.12 as oxygen supplied through pipeline; (ii) Whether the oxygen was marketable so as to attract duty and whether reliance on comparable supplies by other manufacturers violated natural justice.

Issue (i): Whether oxygen carried through a pipeline within the manufacturer's factory fell within tariff entry 2804.12 as oxygen supplied through pipeline.

Analysis: The tariff entry after 1-4-1986 separately covered oxygen in cylinders, in liquid form, and supplied through pipeline. The wording did not require that the pipeline supply must be to an external purchaser. It was sufficient that oxygen moved through a pipeline to a point different from the point of origin.

Conclusion: The oxygen carried through the pipeline was covered by the relevant tariff entry, against the assessee.

Issue (ii): Whether the oxygen was marketable so as to attract duty and whether reliance on comparable supplies by other manufacturers violated natural justice.

Analysis: The oxygen had been shown to be supplied through pipeline in similar circumstances by other manufacturers, and that factual material was treated as having emerged during the hearing. The assessee was therefore not taken by surprise. The Tribunal also held that marketability was established and that the tariff description itself controlled the issue, making the assessee's objection to reference to IS specifications or alleged lack of marketability untenable.

Conclusion: The oxygen was marketable, and there was no violation of natural justice, against the assessee.

Final Conclusion: The appeal failed because the oxygen supplied through pipeline was classifiable under the relevant tariff entry and was marketable, so the refund claim was not sustainable.

Ratio Decidendi: Where a tariff entry expressly covers goods supplied through pipeline, the provision applies even when the pipeline is within the manufacturer's premises, and marketability may be established from comparable supply in similar trade conditions without breaching natural justice if the material was disclosed in hearing.

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