D.C. Mandal, Member (T)

1. By the impugned order the Collector of Central Excise (Appeals) has disposed of five Orders-in-original in which Assistant Collector of Central Excise, Nadiad confirmed demands for differential duty of Central Excise. The dates of the show cause notices, periods covered by the show cause notices, Tariff Item under which the goods were cleared, Tariff Items under which the differential duty was demanded in the show cause notices and the Tariff Items under which the demands were confirmed by the Assistant Collector are given in the following table :-

xxx

Collector (Appeals) has rejected the appeals filed before him by the appellants against the Orders-in-original of the Assistant Collector on the ground that the demands were confirmed on the basis of the test results of the samples drawn from the goods manufactured by the appellants and as such, there was no merit in the appeals.

2. The appellants prayed for introduction of certain additional documents to which no objection was raised by the learned J.D.R. for the respondent. Additional documents were, therefore, allowed to be introduced as evidence.

3. Arguing for the appellants Shri A. F. Patel, learned Advocate has stated that Oil and Natural Gas Commission obtained natural gas from the wells in Bombay High. Pure gas is sold to Electric Supply Companies. Liquid residue was sold as Condensate by Open Tender. One buyer of Condensate was M/s. Petrogena. The said condensate was processed and two products, viz. special boiling point spirit falling under Tariff Item 6 of the Central Excise Tariff and mineral turpentine oil falling under Tariff Item 11 were obtained. Further residue which remains in the course of manufacture of the above-mentioned two products is called residue oil. The present appellants are the Successor to M/s. Petrogena. Appellants obtained Central Excise licence for special boiling point spirit and mineral turpentine. For the residue oil, no licence was obtained by Petrogena as well as by the present appellants. The Central Excise authorities did not ask the appellants or their predecessor to obtain any Central Excise licence. M/s. Petrogena worked for two years and present appellants started working with effect from 31.7.1971. For residue oil appellants maintained register. They accumulated this residue oil and wrote to the Assistant Collector of Central Excise on 10.10.1971 to permit them to use the said oil in Boiler as fuel. No permission or any clarification was received from the Assistant Collector. Appellants used 10,000 litres of residue oil without permission of the Central Excise authorities before 20.10.71. They also sold 10,000 Litres of residue oil on 13.11.71,10,000 Litres on 14.11.71 and 7,500 Litres on 17.11.1971. In all the appellants used/sold 37,500 Litres of residue oil. The learned Advocate has further stated that a sample was drawn from the residue oil on 4.9.1971, but no test result was communicated to the appellants. Department's view was that residue oil was kerosene oil falling under Tariff Item 7 of Central Excise Tariff. Appellants paid duty under this Tariff Item under protest from December, 1971 onwards. The learned Advocate has further argued that residue oil is not mineral product. It was obtained from gas. According to him, the goods are not excisable. He has also contended that if it is held that residue oil is excisable, then it will fall under Tariff Item 10 of the Central Excise Tariff as furnace oil. Appellants are willing to pay duty under this Tariff Item subject to exemption and limitation. It has, further, been stated by the learned advocate that the Department did not declare the factory of the appellants as Refinery under Rule 140 of the Central Excise Rules, although they applied for the same.

4. The next contention of the learned advocate is that samples were drawn on different dates and the same were tested, but complete test reports were not furnished to the appellants. Only extracts from