Amendment to Rule 52A of the Central Excise Rules, 1944, requiring excisable goods to be delivered from a factory or a warehouse only under an invoice signed by the owner of the factory or his authorized agent, was a significant change in the law and any administrative order passed by any authority under the Rules which became inconsistent with the amended Rules became inoperative.

B.P.Singh, J.

1. The petitioners herein have prayed for quashing of the memo dated 6-10-1994 issued by the Assistant Collector of Central Excise, Division II, Jamshedpur (Annexure 1) whereby he has informed the Petitioner No. 1 - company that the permission granted by the Additional Collector vide letter dated 26-2-1987 stands automatically withdrawn in view of amendment to Rule 52A of the Central Excise Rules, 1944 (hereinafter to be referred to as the said Rules). The petitioners have also prayed for quashing of the circular issued by the Central Board of Excise and Customs (Annexure 2) dated 11-2-1994 directing that clearance of liquefied gas in lorries should not be allowed without payment of duty and such permissions granted, if any, should be immediately withdrawn.

2. Petitioner No. 1 company, namely, M/s. Indian Oxygen Limited manufactures compressed oxygen and compressed nitrogan as well as other gases and also liquefied industrial and medical gases. One of the factories of the petitioner-company is located in Jamshedpur. After production, the Company stores the liquefied gases in vacuum insulated storage tanks. The liquefied gases are stored in such tanks at a temperature of approximately 185° Centigrade. Such liquefied gases are despatched to its customers in cryogenic tanker lorries. Before 1986, the liquefied gases were supplied to the customers of the petitioner-company who used to fill up their storage tanks when the tanks became completely dry. Having regard to the capacity of the tanks of their customers, the petitioner-company could supply to them the exact quantity of liquefied gases which their storage tanks could contain. The petitioner-company, however, received complaints from its customers that very often their production activities came to a grinding halt for want of supply of liquefied oxygen/nitrogen, because they had to wait for their tanks to go completely dry and could not fill up their tanks at an earlier stage. With a view to solve the problems faced by their customers, the petitioner-company evolved a revised system of partial supply at regular intervals on weighment basis keeping weigh-bridge pass with the tanker driver. The company obtained an order in writing from the Additional Collector, Central Excise, Patna, on the 25th of February, 1987 (Annexure 5) in exercise of power under Rule 173G(1) proviso (iv) and 52A of the Rules allowing it to remove the liquefied gases in tanker lorries from its factory under the pass-out system without payment of Central Excise duty before hand to make out G.P. 1 and to determine the duty and debit the account-current afterwards subject to the observance of the terms, conditions, restrictions and procedure prescribed by the order.

3. The case of the petitioner-company is that after obtaining such permission, it has been following the procedure approved by the said order of the Additional Collector. The transport-tankers are weighed both before and after decantation. If certain amount of residual liquid gas remained in the tanker, the same was ascertained by weighment of the tanker after it had topped up the customers various installations. Thus, it was only when the tanker arrived at the factory that the petitioner-company was able to ascertain the exact quantity of gas that has been sold. The customer was also required to give a signed delivery note stating the exact quantity received by him at the storage tank installed at his premises. The Petitioner No. 1 company, thereafter, paid the duty on the exact amount that has been delivered.

4. However, by the impugned memo dated 6th October, 1994, Petitioner No. 1 company was informed that the permission already granted by the Additional Collector of Central Excise, Patna, vide letter dated 25th February, 1987, regarding clearance of liquefied gases and carbide sludge without issue of invoice and without payment of duty at the time and place of clearance from the factory stood automatically withdrawn bec