Manufacture under excise law not made out where gas is transferred from tanker to cylinders without repacking or a new commodity.

Filling liquefied gases from cryogenic transport tankers into cylinders, even with some mixing in specified proportions, did not amount to manufacture under Chapter Note 10 to Chapter 28 of the Central Excise Tariff Act, 1985. The tanker was not a bulk pack, so transfer into cylinders was not repacking from a bulk pack to a retail pack, and mere labelling or relabelling was insufficient to trigger the extended definition of manufacture. The record also did not show that mixing produced a new commodity distinct from its constituent gases with different use or marketability. The activity was therefore held not to be manufacture.

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Issues: Whether filling liquefied gases from cryogenic tankers into cylinders, and in some cases mixing gases in specified proportions, amounted to manufacture under Chapter Note 10 to Chapter 28 of the Central Excise Tariff Act, 1985.

Analysis: The tanker used for transporting liquefied gases was held not to be a bulk pack, so transfer of gas from tanker to individual cylinders could not be treated as repacking from a bulk pack to a retail pack. Mere labelling or relabelling, without such repacking, was held insufficient to attract the extended definition of manufacture under Chapter Note 10. The record also did not show that the mixing of gases produced a new commodity distinct from its constituent gases with different uses or marketability.

Conclusion: The activity did not amount to manufacture and the issue was decided in favour of the assessee.

Ratio Decidendi: Filling gases from transport tankers into cylinders, without repacking from bulk to retail packs and without emergence of a new distinct commodity, does not constitute manufacture under Chapter Note 10.

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