Manufacture test for gas filling into cylinders: ancillary charges excluded from assessable value after activity held non-manufacturing.

Filling liquid oxygen and liquid argon into cylinders was treated as not amounting to manufacture, following the assessee's own case and a comparable ruling on liquid ammonia filling. Once the activity was outside the scope of manufacture, the valuation dispute over inclusion of cylinder handling, rental, loading and unloading charges in the assessable value ceased to survive. The impugned order accordingly upheld exclusion of those ancillary charges, set aside the duty demand and penalty, and rejected the Revenue's challenge.

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Issues: Whether filling of liquid oxygen and liquid argon into cylinders amounted to manufacture, and if the activity was not manufacture whether the question of inclusion of cylinder handling, rental, loading and unloading charges in the assessable value survived.

Analysis: The activity had already been held, in the assessee's own case and in a comparable decision on filling liquid ammonia into smaller cylinders, not to amount to manufacture. Once the activity was held not to be manufacture, the valuation dispute concerning inclusion of ancillary charges in the assessable value became irrelevant. The impugned order therefore correctly set aside the duty demand and penalty.

Conclusion: The activity did not amount to manufacture and the Revenue's challenge to exclusion of the charges from assessable value failed.

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