Repair of used LPG cylinders is not manufacture where no new product emerges, so central excise duty cannot be levied.

Repair and refurbishment of old and used LPG cylinders by retesting, cleaning, painting and refitting valves did not amount to manufacture because the cylinders remained cylinders and no new or distinct product emerged. The activity was treated as repair of an existing excisable article, so central excise duty was not leviable on the repaired cylinders and the assessee succeeded on merits.

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Issues: Whether the process undertaken on old and used LPG cylinders received for retesting, repairing, cleaning, painting, refitting of valves and related work amounted to manufacture so as to attract central excise duty on the repaired cylinders.

Analysis: The cylinders received by the assessee were already manufactured cylinders and, after the processes undertaken, the goods that emerged were again cylinders. The work done was in the nature of repair and refurbishment of used cylinders. Since no new and distinct product came into existence, the activity could not be treated as manufacture for the purpose of levy of duty.

Conclusion: The activity did not amount to manufacture and no duty was leviable on the repaired cylinders; the assessee succeeded on merits.

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