H.R. Syiem, Member (T)

1. This is an appeal dated 26-12-79 against Order-in-Appeal No. 122/ASM-1979 dated 3rd September, 1979 passed by the Appellate Collector of Central Excise, Calcutta, and sent with letter dated 8th January, 1980.

2. The dispute is about the use of casing head condensate (CHC) by the Assam Oil Company, Digboi which led to a demand of duty for the period February, 1975 to May, 1977 as the Central Excise authorities said that the condensate was used as a motor spirit and, therefore, should pay Central Excise duty under item 6 of the Central Excise Tariff. The Appellate Collector held that considering all the characteristics of the condensate, its source and its behaviour, it satisfies the definition of motor spirit in all respects and, therefore, the assessment and demand of duty was correct.

3. It is necessary to state briefly the manner in which the condensate is obtained. The crude oil which is lifted from the well goes into a separator which separates the crude oil from the associated gas. In the separator the crude oil is separated from the lighter hydrocarbon, in this case the natural gas. The crude oil drops to the bottom and the lighter gas ascends to t