ON Civil Appeals Nos 289 to 311 of 1965 and 999 to 1001 of 1967
Appeals from the judgments and orders dated July 13 1964 Of Panjab High Court in Civil Writs Nos
587 D 590 D 592 595 D 643 D 851 D 852 D 1163 1164 1167 and 1196 of 1963 45 D of 1964 and 994 588 D 589 D 591 D593 D594 D 1165 1166 1168 1169 1197 1240 1216 and 1155 of 1963 respectively and writ Petition No 212 of 1966
Petition under article 32 of the Constitution of India for the enforcement of fundamental rights
SV Gupte Rameshwar Nath and Mahinder Narain for the appellants in CAs
289 to 311 of 1965
Rameshwar Nath and Mahinder Narain for the appellants in CA No 999 of 1967
SSorabji D section Dang and Ravinder Narain for the appellants in C A No 1000 of 1967
SV Gupte and K K Jain for the appellants in CA No 1001 of 1967
23 N APalkhivala F N Kaka O P Malhotra O C Mathur and Ravinder Narain for the petitioner in WP No 212 Of 1966
CK Daphtary Attorney General B Sen R HDhebar and SP Nayar for the respondents in W P No 212 of 1966 and the respondents in CA Nos 289 to 311 of 1965
C K Daphtary Attorney General and R H Dhebar for the respondents in CAs
999 1000 and 1001 of 1967
N A Palkhivala 0
C Mathur and Ravinder Narain for the intervener in CAs
289 to 311 of 1965
The Judgment of the Court as delivered by Shelat J These appeals by certificate are against the common judgment of the High Court of Punjab which dismissed the writ petitions filed by the appellant companies challenging the legality of excise duty levied against them under Item 14 H in  Sch 1 to the Central Excise and Salt Act 1 of 1944
Writ Petition 212 of 1966 by Tata Chemicals Ltd also raises die same
question
As both the appeals and the writ petition raise a common question of law they were heard together and are disposed of by this common judgment
The appellant companies manufacture sugar by carbonation process as against sulphitation process employed by some other manufacturers of sugar and pay excise duty on the sugar manufactured by them under Item 1 of Sch 1 to the Apt
According to the affidavit of V J Bakre Deputy Chief Chemist of the Central Revenue Control Laboratory these manufacturers bum limestone with coke in a lime kiln with a regulated amount of air and generate a mixture of gases consisting of carbon dioxide nitrogen oxygen and a small quantity of carbon monoxide
Most of the oxygen from the air is used up by the coke in the process of burning itself
The coke so burnt supplies the heat which decomposes the limestone so as to generate carbon dioxide
The gas thus produced is suckedby a pump through a pipe which connects the kiln with the inlet side of the pump
The gas enters the chamber of the pump and is then immediately compressed by means of the compression stroke of the pump
At this stage the gas is forced into a narrower space and as a result of the compression stroke it acquires pressure exceeding the atmospheric pressure
The gas so compressed is let into the delivery pipe which connects the outlet side of the pump with the tank containing the sugarcane juice and enters
the sugarcane juice with the acquired pressure behind it
But for the compression resulting in pressure the gas would not bubble in the sugarcane juice
In the 24 tank there is besides the sugarcane juice milk of lime which is mixed so as to remove the impurity in and refine the juice
Thus it is carbon dioxide which reacts on the lime and what is produced is an insoluble content known as calcium carbonate
The other gases viz nitrogen oxygen carbon monoxide do not contribute in the process of clarification of the sugarcane juice
These are innocuous so far as the process of clarification of sugarcane juice is concerned and escape into the atmosphere by a vent provided in  the sugarcane juice tank
Along with these gases a certain amount of carbon dioxide which remains unabsorbed also escapes
The carbon dioxide content in the mixture of gases ranges from 27 to 365
Thus the process involves the forcing of impure carbon dioxide into a narrower space within the chamber of the pump where it is compressed and pushed first into the delivery pipe and then into the tank containing the juice
The respondents  case therefore was that the process employed by the appellant companies involves compressing carbon dioxide with the pressure achieved pushing it through sugarcane juice
The appellant companies therefore produced carbon dioxide through the lime kiln which was taken first to the Co2 pump and there compressed and then pushed into the tank
The Tata Chemicals Ltd manufactures among other products soda ash by solvay ammonia soda process
The solvay process as described by the said V J Bakre is as follows First common salt is dissolved in water and ammonia gas is passed through such dissolved salt called brine
The ammonia gas gets absorbed in the brine
The solution so formed is called AB solution that is ammoniated brine
The AB solution is introduced at the top of a carbonating tower and passed from section to section
from the top to the bottom of the tower
At the bottom of the tower compressed carbon dioxide is forced through at a pressure of 40 to 50 pounds per square inch and is bubbled through the liquid in all the sections of the tower
The chemical reactions involved in the tower are i Ammonia Gas plus ii Carbon dioxide plus iii water of the brine solution
These react together to form ammonium bicarbonate which reacts with salt in brine to produce sodium bicarbonate and ammonium chloride
The sodium bicarbonate thus formed being much less soluble in the liquid is precipitated and is then taken out from the bottom of the tower
It is then filtered and the sodium bicarbonate in moist condition is left on the bed of the filter and the solution which is mostly of ammonium chloride is pumped to ammonia reaction tower where ammonia is produced
Moist sodium bicarbonate is then washed and is heated in a calciner at 200  centigrade
 The sodium bicarbonate gets decomposed to give soda ash water and carbon dioxide
Carbon 25 dioxide thus produced is reutilised in the cycle of manufacture of soda ash
It contains 85 pure carbon dioxide according to the Company s expert 50 to 60 and is mixed with carbon dioxide sucked by the compressor from the lime kiln
The whole mixture which contains about 60 of pure carbon dioxide is compressed in the compressor to a pressure of 40 to 45 lbs
per inch Thus carbon dioxide is essential in the production of soda ash and is produced by burning limestone with coke in a kiln in the same manner as by the sugar manufacturing concerns which employ carbonation process
The carbon dioxide so produced in the kiln is first compressed in the compressor during the compression stroke and thereafter the piston compresses the gas in the said cylinder at pressure of more than 40 to 50 pounds per square inch
The gas so compressed is compressed carbon dioxide which comes out of another valve in the cylinder and comes into the delivery side of the compressor admixed with carbon dioxide from the calciner
This gas is throughout at a pressure of 40 to 45 lbs
per sq inch
This gas so manufactured is independent of soda ash
The compressed carbon dioxide so produced does not lose its identity of being compressed carbon dioxide
Pure compressed carbon dioxide is isolated from the admixture of gases in the carbonating tower where chemical reaction takes place and is used in the manufacture of soda ash
According to the Revenue the processes employed by the appellant companies and by Tata
Chemicals Ltd thus involve produc tion of compressed carbon dioxide which is amenable to excise duty
Item 14 H of Sch
I reads as follows 14 H Compressed liquefied or solidified gases the following iv Carbon acid Fifty per cent Fifty per cent carbon dioxide ad valorem By a notification dated March 2 1963 issued under r 8 1  of the Central Excises Rules 1944 the Central Government exempted as from April 24 1962 carbonic acid utilised in manufacture of sugar within the factory of production for clarifying and bleachin sugarcane juice or syrup from so much of the excess of Rs 25 per metric tonne
The contentions raised on behalf of the appellant companies and Tata Chemicals Ltd may be summarised as follows  1 that the lime kiln is maintained to generate a mixture of gases and not carbon dioxide 4Sup
CI168 3 26 2 that at no stage in the process of generating this mixture and sucking it into the sugarcane juice for refining carbon dioxide which forms one of the contents of the said mixture is either compressed liquidified or solidified 3 that the mixture of gases so generated is not carbon dioxide as known to the market 4 that according to the specifications laid down by the Indian Standards Institution carbon dioxide content has to be at least 99 5 that the mixture of gases so generated has no other use except for processing sugarcane juice 6 that the said mixture is neither sold nor is marketable nor known to the trade 7 that the excise duty sought to be recovered on the con tent of carbon dioxide in the said mixture of gases cannot fall under Item 14 H 8 that these concerns are not manufacturers of carbon dioxide as carbon dioxide is not separated from the said mixture of gases by any process nor is the carbon dioxide content in the said mixture compressed liquefied or solidified 9 that the mere fact that the said mixture of gases is passed through a conduit pipe by a process of suction cannot mean that carbon dioxide becomes compressed carbon dioxide at that or any other stage 10 that the term compressed in Item 14 H contemplates the form in which the article sought to be levied is manufactured
There is no separation of carbon dioxide from the said mixture at any stage nor is it compressed or stored as carbon dioxide in cylinders and lastly 11 that the duty being on goods it can be charged only on goods known as carbon dioxide in the trade and marketable as such
The contentions of the Revenue on the other hand were 1 that the mixture of gases generated as aforesaid is nothing but impure carbon dioxide in the sense that during the process of burning limestone with coke a small quantity of carbon monoxide is released by the burning of coke the other gases in the mixture being nitrogen and oxygen derived from the  air which is let into the kiln to aid combustion 27 2 that these concerns require carbon dioxide for refining sugarcane juice and manufacture it out of limestone and coke
The other gases which get mixed up are unavoidable on account of the process employed by them 3 that these extraneous gases can be separated and the manufacturers would separate them if what they require is pure carbon dioxide
They do not do so because carbon dioxide mixed with other gases produces the same effect in the process of refining as without them 4 that the fact that in the process Of its manufacture carbon dioxide gets mixed up with other gases does not mean that carbon dioxide which is intended to be and is in fact produced loses its characteristics as such
The gas thus produced contains 30 to 35 carbon dioxide 5 that the specifications laid down by the Indian Standards Institution are not relevant as they are for cylindered carbon dioxide bought and sold in the market as pure carbon dioxide 6 that carbon dioxide produced by these concerns can be sold in the condition in which it is produced and used by other sugar mills and by factories manufacturing soda ash by solvay process
In support of their contentions the appellant companies as also the Tata Chemicals Ltd relied on the specifications laid down by the Indian Standards Institution and the several affidavits made by concerns using carbon dioxide for the manufacture of their respective goods
As most of them are identical it is sufficient to take the affidavit of one Shantilal Patel as typical
The deponent there asserts that the company of which he is the senior chemist uses carbon dioxide in considerable quantity in manufacturing aerated waters that carbon dioxide so used contains 995 of pure carbon dioxide that compressed liquidified or solidified carbon dioxide as known to the trade or sold in the market contains a minimum of 99 carbon dioxide conforming to the specifications of the Indian Standards Institution that such carbon dioxide is contained in steel cylinders under a pressure of minimum of 1000 lbs
per sq inch and that kiln or calciner gas is not known to the trade as carbon dioxide nor is it marketed as such
Dr Homi Ruttonji whose affidavit was produced by Tata Chemicals Ltd states that for the purpose of manufacturing carbon dioxide an elaborate plant shown in the annexure to his affidavit would have to be set up separate from the plant and equipment used in the manufacture of soda ash and refutes the statement of the said Bakre that compressed carbon dioxide is forced through at a pressure of 40 to 45 lbs
per sq inch or that 28 at the bottom of the said carbonating tower pure compressed carbon dioxide is or can be isolated from the mixture of gases in that tower where chemical reaction takes place
He also refutes the statement that the process of generating kiln gas is independent of the manufacture of soda ash and states that the process of manufacture of soda ash is a continuous and integrated process wherein a certain quantity of kiln gas is released which is directly utilised without removal or storage in the manufacture of soda ash
According to him kiln gas released during the manufacture of soda ash is never known as carbon dioxide in the market
To obtain marketable carbon dioxide from kiln gas an elaborate plant would be required for separation and purification and it is such carbon dioxide which becomes marketable after it is compressed at a pressure of 1000 to 1800 lbs
per sq inch in cylinders of the specifications laid down by the Government of India under Rule II of the Gas Cylinder Rules 1940
Notwithstanding the divergence of opinion between the two experts one thing is clear and that is that in the case of both sugar and soda ash the manufacturer does require carbon dioxide for the purpose of producing the two articles and sets up lime kiln for that purpose
The question is whether what he actually produces by combusting limestone with coke is carbon dioxide and if so whetheris compressed carbon dioxide as contemplated by Item 14 H
In the Courseof their arguments counsel referred to certain works on Chemistry in general and sugarcane industry in particular
There are observations in some of them which
might throw some light on the question before us
The Handbook of Cane Sugar Engineering by E Hugot 1960 ed at pp 286 to 289 states that carbon dioxide necessary for the carbonation process is produced at the same time as lime in a lime kiln adjacent to the sugar factory
The combustion of limestone with coke produces kiln gases consisting of carbon dioxide carbon monoxide oxygen nitrogen and a certain amount of moisture
The proportion of carbon dioxide in these kiln gases varies from 25 to 33 averaging about 30
The carbon dioxide leaving the washer is at a temperature of 60 C
Its pressure at the suction of the pump varies from 16 to 5 in of mercury and the delivery pressure varies from 4 to 10 lbs
per sq inch
It is also stated that thepumps known as Co2 pumps are fully analogous to air pumps
see also Cane Sugar  Handbook by Guildord L Spencer and G P Meade p 138
The carbonation process according to Hugot is one of the cheapest cleanest id most reliable process in the sugarcane industry ensuring standard quality of sugar
Roger s Industrial Chemistry 6th ed p 415 29 in the chapter dealing with Alkali and Chlorine production states thus The kilns used in the process are built and operated with special precautions to produce as high a concentration of Co as possible
In practice 41 to 43 per cent of Co2 is
obtained in kiln gases with very little Co or 02 the rest of the gas being N152
 At pp 415 to 417 of the said work the Solvay process is described in the same terms as in the affidavit in support of the petition of Tata Chemicals Ltd JA Timm in his General Chemistry 4th ed p 470 states that commercial carbon dioxide can be obtained as a bye product of certain industries eg flue gases R Norris Shreve in his Chemical Process Industries 3rd ed states that there are three important processes for commercial production of carbon dioxide viz flue gases by burning carbonacious material bye product from fermentation industries through dextrose breakdown into alcohol and carbon dioxide and bye product of lime kiln operation
He also states that an absorption system is used for concentrating C02 gas obtained from sources 1 and 3 to over 99 and that in all cases the almost pure carbon dioxide must be given various chemical treatments for the removal of minor impurities which contaminate the gas
Similarly KirkOthmer in the Encyclopedia of Chemical Technology 2nd ed Vol 1 p 722 observe as follows  The carbon dioxide evolved consists of both that generated by the decomposing limestone and  that resulting from combustion of the carbon in the coke
The kiln gases are considerably diluted with nitrogen from the air used to burn the coke they usually con tain 37 to 42 carbon dioxide together with stone dust coke ash particles and gaseous impurities
The gas is cooled to some extent in the kiln itself by the upper layers of stone it is further cooled and purified in water scrubbers until it is absolutely free from dust and tarry matters and then in the more modern plants which make a very pure soda ash the gas is finally purified electrostatically Arthur and Elizabeth Rose in their Condensed Chemical Dic tionary 7th ed p 178 divide commercial carbon dioxide into two grades both of them having at least 99 carbon dioxide
Such carbon dioxide when solidified is packed in 50 lbs
blocks in insulated boxes and is at a temperature of 109  below zero
When liquified it is packed in steel cylinders
The uses of solidified or liquefied carbon dioxide are refrigeration of foods carbonated beverages industrial refrigeration fire extinguishers welding etc
30 These extracts show that commercial carbon dioxide as brought to the market for being bought or sold and used for the purposes enumerated above has content of at least 99 of carbon dioxide and is either compressed and packed in steel cylinders or liquefied or solidified
As the Revenue argued these concerns undoubtedly require carbon dioxide in the processes employed by them while manu facturing sugar and soda ash and to meet their requirement they have set up lime kilns by which they produce kiln gas which includes carbon dioxide to the extent of about 30 to 35 which they in fact use after compressing it through a pump or otherwise at one stage or the other in their manufacturing processes
Nonetheless is it possible to say that the lime kilns set up for the aforesaid purpose produce carbon dioxide and even if it be so that at one stage or the other through the pump or otherwise the carbon dioxide so produced becomes compressed carbon dioxide as envisaged by the legislature when it decided to introduce Item 14 H in the First Schedule  It cannot be gain said that by burning limestone with coke in the kiln the manufacturer actually produces kiln gas of which one of the constituents undoubtedly is carbon dioxide and which he utilises while producing his ultimate excisable goods
But if it is possible to say that what he produces is carbon dioxide during the process which Mr Palkhiwala termed as an integrated and continuous manufacturing process or separately as the Revenue insisted it is equally possible to say that the combustion of limestone with coke results in the manufacture of nitrogen whose content in the kiln gas is about 53
As the text books produced before us and the affidavits show the correct picture is that what is produced is kiln gas which consists of several gases viz carbon dioxide carbon monoxide oxygen and nitrogen the last one being in a larger quantity than carbon dioxide
The mixture of gases so generated is known as kiln gas in the trade ie to those who manufacture sugar and soda ash
The affidavits of concerns which use carbon dioxide definitely assert that kiln gas is never known in the market as carbon dioxide nor is it a marketable article in the sense that it is loose and is not transportable nor is it brought to the market for being bought and sold unless carbon dioxide is extracted out of it
Such extraction requires an elaborate plant
After extraction it would have to be compressed in cylinders of certain specifications or liquefied or solidified before it can become a marketable article
It is true as the Revenue contended that the gas produce through the kiln can be made marketable in the sense that it car be sold in the very same condition in which it is produced to concerns interested in the carbonation process through for example pipes
But apart from such a method of disposal being 31 uneconomic and hardly likely to be employed by the trade though it is possible in theory what would be transported is that which is produced through the kiln viz the kiln gas containing among other things a certain quantity of carbon dioxide
As one of the text books points out carbonation process is employed by manufacturers of sugar because it is one of the cheapest methods to ensure production of sugar of standard quality
The fact is that in employing carbonation process the manufacturer who requires carbon dioxide produces kiln gas and as that mixture of gases contains carbon dioxide he pumps through a pipe that mixture of gases and not carbon dioxide alone ex tracted from it
Therefore in truth and in fact what he uses is the kiln gas produced by him in the lime kiln
Even assuming that this gas is compressed either through a narrow pipe what is compressed is the kiln gas and it is that kiln gas containing no doubt a certain percentage of carbon dioxide which is inducted in the sugarcane juice for refining
The same must also be said of the solvay process used in the production of soda ash though in that case the percentage of carbon dioxide is larger than in the case of refining sugarcane juice
The Act charges duty on manufacture of goods
The word manufacture implies a change but every change in the raw material is not manufacture
There must be such a transformation that a new and different article must emerge having a distinctive name character or use
The duty is levied on goods
As the Act does not define goods the legislature must be taken to have used that word in its ordinary dictionary meaning
The dictionary meaning is that to become goods it must be something which can ordinarily come to the market to be bought and sold and is known to the market
That it would be such an article which would attract the Act was brought out in Union of India vs Delhi Cloth  General Mills Ltd1 The contention there was that in the course of manufacture of vanaspati a vegetable product from groundnut and til oil the respondents brought into existence at an intermediate stage of manufacturing refined oil which fell within the description of vegetable nonessential oil all sorts in Item 23 of the First Schedule
The contention would seem to assume that the goods subjected to duty must be goods known as such in the market
The contention was that the respondents after they bought raw oil with all its impurities manufactured by application of certain processes of refinement refined oil which was the same as refined Oil available in the market and that it was refined oil which became after further processes the ultimate vegetable product
It was argued that the fact that the vegetable product was the ultimate 1 1963 Supp 1 SCR 586
32 product and was chargeable to duty did not alter the position that at an earlier stage the respondents manufactured refined oil as known to the market and that the fact that they did not put this refined oil in the market but used it to produce the finished product did not affect their liability
This Court held that if a new substance was brought into existence from raw materials and that substance was the same as refined oil as known to the market it would be subject to duty
The question therefore was was the substance sought to be charged refined oil known to the market  The affidavits showed that deodorization was necessary before the product could be called refined oil
It was not in dispute that that process was employed after hydrogenation and not at the stage when what was called refined oil came into existence at an intermediate stage
No evidence was produced by the Union of refined oil being brought to the market without deodorization
It was held that raw oil purchased by the respondents for the purpose of manufacturing vanaspati did not become at any stage refined oil as known to the consumers and the commercial community
The affidavits filed in the instant cases and the scientific works referred to above show that the mixture of gases produced from the kiln is known both in trade and in science as kiln gas and not as carbon dioxide The Revenue has not produced any affidavit of persons dealing in carbon dioxide to show that kiln gas is known to the market as carbon dioxide
The aforesaid affidavits show that carbon dioxide known to and brought in the market for being bought and sold for its diverse uses is carbon dioxide compressed liquefied or solidified as Item 14 H describes it
The analogy given by the learned Attorney General of a manufacturer of cotton cloth also producing at an intermediate stage cotton yarn and such cotton yarn being liable to excise duty would not help the Revenue as cotton yarn obtained by such a manufac turer is known as such in the commercial community and brought to the market for being bought and sold
That cannot be said of kiln gas
If kiln gas were to be offered in discharge of a contract to supply carbon dioxide it would certainly be rejected on the ground that it is no carbon dioxide but is kiln gas
It is also not correct to say that because the sugar manufacturer wants carbon dioxide for carbonation purpose and sets up a kiln for it that he produces carbon dioxide and not kiln gas
In fact what he produces is a mixture known both to trade and science as kiln gas one of the constituents of which is no doubt carbon dioxide
The kiln gas which is generated in these cases is admittedly never liquefied nor solidified and is therefore neither liquefied nor solidified carbon dioxide assuming that it can be termed carbon dioxide
It cannot be called compressed carbon dioxide as 33 understood in the market among those who deal in compressed carbon dioxide
Compressed carbon dioxide is understood generally as carbon dioxide compressed in cylinders with pressure ranging from 1000 to 1800 lbs
per sq inch
The mere fact that at one stage or the other kiln gas is pressed at 40 to 45 lbs
per sq
inch by a pump or otherwise cannot mean that it is compressed carbon dioxide
At the same time the duty being on manufacture and not on sale the mere fact that kiln gas generated by these concerns is not actually sold would not make any difference if what they generate and use in their manufacturing processes is carbon dioxide
The fact that the gas so generated has carbon dioxide below 99 and does not conform to the specifications of the Indian Standards Institution also would not matter for the gas may be sub standard provided what is produced is carbon dioxide
In our view the gas generated by these concerns is kiln gas and not carbon dioxide as known to the trade ie to those who deal in it or who use it
The kiln gas in question therefore is neither carbon dioxide nor compressed carbon dioxide known as such to the commercial community and therefore cannot attract Item 14 H in the First Schedule
In this view it is not necessary for us to consider certain other contentions raised by the appellants and the petitioners in the writ petition
In the result the appeals and the writ petition must allowed and the orders passed by the High Court in the appeals must be set aside
We hold that the demand notices served on these concerns are illegal and must be quashed
The respondents in these appeals as also in the writ petition will pay costs to the appellants and the petitioner in the writ petition
The costs will be one hearing fee for the appeals and a separate set of costs in respect of the writ petition
RKPS Appeals and Petition allowed


Summary:
The appellant companies manufactured sugar by carbonation process
land paid excise duty on sugar manufactured by them under item 1 of Sch 1 to the Central Excise and Salt Act 1944
According to an affidavit filed on behalf of the respondents these manufacturers employed a process of burning lime stone with coke in a lime kiln with a regulated amount of air whereby a mixture of gases was generated consisting of carbon dioxide nitrogen oxygen and a small quantity of carbon monoxide
The gas thus produced was thereafter compressed so as to achieve pressure exceeding atmospheric pressure and then passed through a tank containing sugarcane juice so as to remove impurities from it and to refine the juice
For this process of refining it was only the carbon dioxide in the gas which was used and the other gases ie nitrogen oxygen and carbon monoxide escaped into the atmosphere by a vent provided for the purpose
The carbon dioxide content in this mixture of gases ranged from 27 to 365
Similarly another company manufactured soda ash by solvay ammonia soda process for which also carbon dioxide is required and this was produced by the petitioner by burning lime stone with coke in a kiln in the same manner as the appellant sugar manufacturing companies employing the carbonation process
The respondents regarded all the companies as manufacturers of compressed carbon dioxide and levied excise duty on them under Item 14 H in Sch 1 to the Act
The appellants filed writ petitions in the High Court challenging the validity of this excise duty but these petitions were dismissed
It was contended inter alia on behalf of the appellants that the lime kiln was maintained to generate a mixture of gases and not carbon dioxide and at no stage in the process of generating this mixture and passing it through the sugarcane juice was carbon dioxide which formed one of the contents of the mixture either compressed liquidified or solidified
The mixture of gases so generated was not carbon dioxide as known to the market nor was it according to the specifications laid down by the Indian Standards Institution which required the carbon dioxide content to be at least 99
Therefore the excise duty sought to be recovered on the content of carbon dioxide in the mixture of gases could not fall under Item 14 H Furthermore the duty being on goods it could be charged only on goods known as carbon dioxide in the trade and marketable as such
22 HELD  The gas generated by the appellant companies was kiln gas and not carbon dioxide as known to the trade ie to those who deal in it or who use  it
The kiln gas in question
therefore is neither carbon
dioxide nor compressed carbon dioxide known as such to the commercial community and therefore cannot attract Item 14 H in the First Schedule
It was not correct to say that because the sugar manufacturer wants carbon dioxide for carbonation purposes and sets up a kiln for it that he produces carbon dioxide and not kiln gas
In fact what he produces is a mixture known both to trade and science as kiln gas one of the constituents of which is no doubt carbon dioxide
The kiln gas which is generated in these is admittedly never liquified nor solidified and is therefore neither liquified nor solidified carbon dioxide assuming that it can be termed carbon dioxide
It cannot be called compressed carbon dioxide as understood in the market among those who deal in compressed carbon dioxide
Compressed carbon dioxide is understood generally as carbon dioxide compressed in cylinders with pressure ranging from 1000 to 1800 lbs
per sq inch
The mere fact that at one stage or the other kiln gas is pressed at 40 to 45 lbs
per sq
inch by a pump or otherwise cannot mean that it is compressed carbon dioxide
At the same time the duty being on manufacture and not on sale the mere fact that kiln gas generated by these is not actually sold would not make any difference if what they generate and use in their manufacturing processes is carbon dioxide
The fact that the gas so generated has carbon dioxide below 99 and does not conform to the specifications of the Indian Standards Institution also would not matter for the gas may be sub standard provided what is produced is carbon dioxide
32 D H Union of India v Delhi Cloth  General Mills Ltd 1963 Supp
I SCR 586 referred to