TaxTMI 
TaxTMI 
2026 (8) TMI 325
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.... Natural Gas (CNG) is cleared in cylinders to M/s. Indian Oil Company Ltd. on payment of Central Excise Duty. The dispute, however, is with reference to clearances made in cascades during the period under dispute. Such clearances were made to the premises of their customers where they had installed Pressure Reducing Skids (PRS) wherein the CNG was subjected to decompression to make Natural Gas which was delivered to their customers. No Central Excise Duty was paid by the assessee on such clearances. The Department was of the view that Central Excise Duty will be payable on such gas. Periodical Show Cause Notices were issued, which culminated in confirmation of the total demand of Rs.8,97,80,202/- along with interest and penalty on the appellant-company, and penalty on the second appellant [Shri Yogendra Kumar, Modi, Chairman - CEO], vide the Orders-in-Original all dated 21.02.2022. On Appeal, the Commissioner (Appeals) vide the impugned order has affirmed the demands. Hence, the appellants have filed these appeals before the Tribunal. 1.1. The details of the present Appeals have been summarized in the Table provided below: - Sl. No. CESTAT Appeal No. Order by JC B....
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..... Commissioner of Commercial Taxes [2017 (354) E.L.T. 561 (All.)] wherein the Hon'ble High Court held that when the Natural Gas is compressed for the purpose of transportation, the same cannot be treated as CNG for taxing purpose. 2.3. Accordingly, it is prayed that the impugned demand imposing Excise Duty, interest and penalty on the appellant-company be set aside and the appeals may be allowed 3. So far as the penalty on the second appellant is concerned, the Ld. Counsel submits that he has classified the goods as non-excisable as per the industry practice and based on the decision of the Tribunal in their own case (supra). It is submitted that when the Tribunal itself has affirmed the interpretation in favour of the appellants in the previous case, no case can be made out against the second appellant [Chairman of the company] for imposing penalty on him. Accordingly, the penalty imposed on the second appellant is requested to be set aside. 4. The Ld. Authorized Representative, appearing on behalf of the Revenue, submits that the process undertaken by the appellant results in a manufactured product in terms of Section 2(f). Therefore, he justifies the confirmed demands a....
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....entered into with the industrial consumers, in terms of which the purchase of the gas by the industrial consumers is to be at normal pressure (less than 2 barg). Further, in terms of the contracts, the sales take place at the premises of the buyers and for which the element of freight is included in the price of the goods. In other words, the marketing of the goods is done not as CNG but as natural gas at normal pressure. In view of these facts, as rightly stated by the appellant, the compression of the gas to CNG and its carriage to the premises of the industrial consumers in cascades is only for ease of transportation. 11. I, am, therefore, of the view that the appellant has not manufactured CNG within the meaning of Section 2(f) of the Central Excise Act, 1944 read with Note 5 to Chapter 27 of the Central Excise Tariff. In that case, there is no question of payment of any duty by the appellant." 8. We note that even though the Natural Gas is transported to the customers' premises in compressed form, such process of compression has been done for the purposes of transportation only. Such process cannot be considered as a process of manufacture, since the goods ar....
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....No.5 of Chapter 27, which deals with Compressed Natural Gas (CNG). He submits that admittedly there is no allegation in the Show Cause Notice that the Appellant has been extracting or manufacturing CNG. He also takes us through to some of the invoices raised by them on their client showing that they have been selling CBM and also paying the VAT treating the same as goods. He relies on the detailed finding of the Adjudicating Authority dropping the demand of Rs. 11,12,41,507/- ... 6. On going through the appeal papers and several documentary evidences filed by the Revenue, we find from the Page No.27 of the submissions made by Revenue that after filing the Appeal, the Department has directed the Assistant Commissioner, Anti-Evasion to visit the unit of the Appellant and give a verification report on the activity undertaken by them. The Assistant Commissioner vide his Report dated 20.03.2018 has given the following report:- "Acting on intelligence, a team of Head Quarter Anti-Evasion unit of the erstwhile Durgapur, Central Excise & Service Tax, Commissionerate had visited the factory premises of M/s. Essar Oil Limited, CBM Raniganj Project on 14.03.2017. Du....