2013 (12) TMI 808 - AT - Central Excise

Tribunal rules refilling gas cylinders not 'manufacture' under Central Excise Tariff Act

COMMISSIONER OF CENTRAL EXCISE Versus M/s SANGHI OXYGEN (BOMBAY) PVT LTD

COMMISSIONER OF CENTRAL EXCISE Versus M/s SANGHI OXYGEN (BOMBAY) PVT LTD - TMI Issues:1. Whether refilling of gas from tankers to cylinders amounts to 'manufacture' for the purpose of Central Excise duty liability.2. Interpretation of Note 10 of Chapter 28 of the Central Excise Tariff Act, 1985 regarding labeling, re-labeling, and repacking activities constituting 'manufacture.'Issue 1: Refilling of gas from tankers to cylindersThe appeal pertained to the question of whether refilling gas from tankers to cylinders constitutes 'manufacture' for Central Excise duty liability. The respondent, a manufacturer of goods under Chapter 28, purchased Argon Gas in tankers, unloaded it into tanks, and then filled it into cylinders. The Revenue contended that this activity amounted to manufacture and demanded excise duty. However, the respondent argued that based on a Tribunal decision and the absence of labeling or re-labeling, the activity did not constitute manufacture. The lower appellate authority and the Tribunal concurred, holding that the refilling process did not meet the criteria for manufacture, as per relevant legal provisions and precedents.Issue 2: Interpretation of Note 10 of Chapter 28The debate centered on the interpretation of Note 10 of Chapter 28 concerning activities that amount to 'manufacture.' The Revenue relied on a circular and argued that the refilling activity fell within the ambit of manufacture based on the definition of 'packing' and the presence of the manufacturer's name on the cylinders. Conversely, the respondent contended that they did not engage in labeling or re-labeling, and the refilling did not constitute repacking from bulk to retail packs. The Tribunal analyzed the legal requirements under Note 10, emphasizing the necessity of labeling and repacking for an activity to qualify as manufacture. It concluded that the refilling process undertaken by the respondent did not fulfill these conditions, thereby upholding the lower appellate authority's decision and dismissing the Revenue's appeal.In conclusion, the Tribunal ruled in favor of the respondent, holding that the refilling of gas cylinders from tankers did not amount to 'manufacture' under the Central Excise Tariff Act. The decision was based on the lack of labeling or re-labeling activities and the absence of repacking from bulk to retail packs, as required by the relevant legal provisions. The Tribunal emphasized the specific criteria outlined in Note 10 of Chapter 28 and clarified that the refilling process alone did not meet the threshold for manufacture. Consequently, the appeal filed by the Revenue was dismissed for lacking merit, affirming the lower appellate authority's decision.