2024 (9) TMI 1590

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....are engaged in the manufacture of excisable goods viz. industrial gases, medical grade Oxygen etc. falling under Chapter 28 of the Central Excise Tariff Act, 1985(CETA, 1985 for short). On the basis of intelligence, investigation was initiated against the appellant as they were clearing 'synthetic air' as 'zero air' without payment of duty by misclassifying the same under Chapter Sub-heading 28510030 of CETA, 1985. Consequently, the officers visited their premises on 26.10.2007 and retrieved the records from the premises. On completion of investigation, a show-cause notice was issued to them on 02.01.2008 demanding duty of Rs.5,90,310/- for the period December 2002 to June 2007 on the quantity of Zero Air cleared from their factory without ....

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....tankers. As per the ratio required by the customers, Nitrogen and Oxygen are mixed and cleared as Synthetic air, by classifying the said product as a mixture of gases under 2804. Thus, Synthetic air is mixture of Nitrogen and Oxygen. Since Synthetic air is manufactured by process of mixing the Nitrogen and Oxygen, it contains negligible traces of Argon. 3.1 Further, he has submitted that the distinction between Zero air and Synthetic air depends on the process of manufacture and since Zero air is obtained from the natural air by way of compression and removal of Carbon di-Oxide, moisture, dust into pure air; the same was classified by the appellant as compressed gas following the decision of the Tribunal in the case of Indian oxygen Limi....

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....lly stated that the Zero air purchased by the customers from the appellant which cannot be equated with compressed gas, as compressed gas cannot be used for the purpose of lab test. 5. Heard both sides and perused the records. 6. The short issue involved in the present appeal for consideration is, whether the 'Zero Air' cleared by the appellant during the period December 2002 to June 2007 is classifiable under Chapter heading 2851 as compressed air attracting NIL rate of duty or classifiable under Chapter heading 2804 attracting 16% duty as confirmed in the impugned order. 7. Undisputedly the appellants are engaged in the manufacture of various gases like Oxygen, medical Oxygen, Nitrogen, Liquid Nitrogen, Hydrogen, Synthetic gas, Z....

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....cetates and other solvents. It is stated that they purchased Zero Air from the appellant and categorically stated that the said Zero Air contains 78% of Nitrogen, 20.8% of Oxygen and 1.2% of Argon and they do not use the same as Compressed Air in or in relation testing their manufacture of their finished products, since Compressed Air cannot be used in Gas Chromatograph test; besides, composition of Compressed Air is not of required standard for Gas Chromatograph test. Further it is stated by him that there is no difference between Synthetic Air and Zero Air as both are one and the same. In his statement dated 07.11.2007, Mr. Devendra Kumar, Scientist of M/s. EID Parry (India) Limited, Bangalore has also categorically disclosed that they pu....