LPG cylinder filling as manufacture supports industrial undertaking status and blocks higher electricity duty reclassification.

Filling LPG cylinders with compressed gas is treated as a manufacturing process under the Gas Cylinder Rules, 1981 because gas manufacture includes cylinder filling and transfer of compressed gas. On that basis, LPG bottling units fall within the statutory definition of an industrial undertaking under the Bombay Electricity Duty Act, 1958. The effect is that electricity consumed by such units remains subject to the lower industrial duty rate and cannot be reclassified to attract the higher 60% rate merely on the footing that the activity is non-manufacturing.

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Issues: Whether LPG bottling and cylinder filling activities constituted manufacturing so as to fall within the definition of industrial undertaking under the Bombay Electricity Duty Act, 1958, and whether the electrical energy consumed by the petitioners could be reclassified and subjected to electricity duty at 60%.

Analysis: The petitioners' activity of filling cylinders with compressed LPG was treated as a manufacturing process in the light of the Gas Cylinder Rules, 1981, which define manufacturing of gas to include filling of cylinders and transfer of compressed gas from one cylinder to another. On that basis, the units fell within the statutory definition of industrial undertaking under Section 2(bb) of the Bombay Electricity Duty Act, 1958, and the earlier levy at 20% was held to have been correctly applied. The Court also relied on its earlier decision on an identical issue and held that the respondent authorities were not justified in reclassifying the consumption and demanding duty at the higher rate of 60%.

Conclusion: The petitioners' LPG bottling units were industrial undertakings engaging in manufacturing activity, and the impugned demand and reclassification of electricity duty at 60% were unsustainable.

Ratio Decidendi: Filling LPG cylinders with compressed gas amounts to manufacture for the purposes of the electricity duty legislation, and such activity falls within the statutory category of industrial undertaking, barring reclassification to the higher residuary duty rate on that basis.

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