S. Venkatesan, Senior Vice-President

1. This is a revision application (hereinafter called "appeal") filed before the Central Government which under Section 35P of the Central Excises and Salt Act, 1944, stands transferred to this Tribunal to be disposed of as if it were an appeal presented before the Tribunal.

2. The basic question involved in this appeal is whether the steam generated in the factory of the appellants, employed for internal motive power and thereafter supplied to two other units for their utilisation, is eligible for exemption from excise duty in terms of Notification No. 118/75-C.E., dated 30-4-75. Under this notification goods falling under Item No. 68, manufactured in a factory and intended for use in the factory in which they are manufactured, or in any other factory of the same manufacturer, are exempt from excise duty. The question is whether the steam used in the manner described above qualifies for this exemption. The appellants have also raised the question of limitation, which will be referred to separately.

3. Appearing before us for the appellants, Shri Kapoor explained the process. He submitted that what was generated in the factory was high pressure steam, at a pressure of 61.5 kg. per square centimetre. After being used for internal motive power, it became medium pressure steam, at a pressure of 18 kg. per square centimeter of low pressure steam, at a pressure of 4 kg. per square centimetre. It was this medium pressure and low pressure steam, which was supplied to the other two units. Admittedly, these two units are manufacturers different from the appellants. However, it was Shri Kapoor's contention that by employing high pressure steam within their factory, they must be deemed to have "used" it, and therefore it should be taken as having discharged its duty liability under Item 68. The medium pressure or low pressure steam, which it became and which was taken to other factories could not be charged to duty under Item 68, because this would amount to double taxation on the same goods and under the same Tariff Item.

4. In support of his contention that the high power steam did not become a different item of goods on conversion to medium pressure or low pressure steam, Shri Kapoor referred to the famous English "Saccharine case" where it had been held that saccharine in different concentrations did not become different goods.

5. It was observed that under Item 68, the Notification No. 58/75, dated 1-3-75 had been issued, covering intermediate goods and component parts used for captive consumption. It was only on 30-4-75 that Notification No. 118/75 was issued which covers all goods used for captive consumption. Shri Kapoor fairly admitted that the exemption was not admissible in respect of steam produced during the period 1-3-75 to 29-4-75. (This was, however, without prejudice to his argument on limitation).

6. For the Department, Shri Sachar submitted that the argument of double taxation was dropped by them before the Appellate Collector and could not be allowed to be revived before us. He also submitted that the concept of double taxation was accepted in Central Excise Law. In this connection he cited the judgment of the Andhra Pradesh High Court in the case of Standard Packagings v. Union of India and Anr., reported in 1983 E.L.T. 786. In para 8 of that judgment it has been observed that there is nothing in law or any statute including the Constitution under Article 265 prohibiting double taxation in any fiscal enactments. The Tribunal itself in its Order No. Dl84/83, dated 18-3-83 in the case of Ceakay Rubber Industries (1983 E.C.R. 687) had held that the concept of double levy is an accepted principle in Excise law if the basic or intermediary article had undergone transformation after process of manufacture. Shri Sachar submitted that the exemption Notification No. 118/75 was conditional on the use of the steam within the factory and if the condition was not observed, the duty liability re