2003 (7) TMI 626

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....ading 27.10 of the Schedule to the Central Excise Tariff Act or under Heading No. 27.09/27.11 of the Tariff. 2. Sh. V. Lakshmikumaran, learned Advocate, mentioned that the appellants manufacture Liquefied Petroleum Gas (LPG) from natural gas; that natural gas is the mixture of various hydrocarbons and broadly consists of C1, C2, C3, C4 (Propane & Butane); that in the process of extraction of LPG, a mixture of C5 and C6 called as NGL emerges inevitably; that NGL is highly unstable in the atmospheric temperature and pressure and as such is not marketable; that it had never been marketed; that the moment NGL in the liquid state enters Lean Gas Header, in the Lean Gas Pipeline it mixes with the lean gas, gets vaporised and becomes part ....

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....itself or in admixture with any other substance is suitable for use as fuel in spark ignition engines; that NGL also does not satisfy the conditions of Note 2 to Chapter 27 of the Tariff as it is neither petroleum oil or oil obtained from bituminous minerals; that it is also not a mixed unsaturated hydrocarbon. He also mentioned that the Board vide Advice No. 121/81, dated 17-11-1981 has classified oil condensates as a crude oil under Tariff Item No. 68 of the Old Central Excise Tariff and not under Tariff Item 6 relating to Motor Spirit which has the same definition under Heading 27.10; that thus NGL will merit classification under Heading No. 27.09. He relied upon the decision in the case of Oil India Ltd. v. C.C.E., Shillong, [2002 (148)....

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....d 49 of the Central Excise Rules; that since there is no removal of goods from factory, no duty is leviable; that 'spiking back of NGL' into pipeline does not amount to internal consumption by the appellants for the manufacture of lean gas; that they are in any case not manufacturing lean gas. 3.3. Finally, the learned Advocate submitted that the extended period of limitation under Sec. 11A(1) of the Central Excise Act cannot be invoked as the Department was fully aware of the facts which is evident from the Registration Certificates issued to them; that it is universally known that in the process of extraction of LPG from natural gas, NGL would emerge; that accordingly non-submission of this information to the Department by them do....