Tribunal: Gas activities not manufacturing; Show cause notice timing not suppressed facts

The Tribunal held that the appellant's activities of refilling gases and mixing gases did not amount to "manufacture" under Chapter Note 9 to Chapter 28 of CETA, 1985. The Tribunal found that the processes undertaken, such as repacking from bulk packs to retail packs, labeling, and mixing gases, did not alter the essential characteristics of the products to constitute "manufacture." Additionally, the extended period for issuing the show cause notice was deemed inapplicable as there was no suppression of facts by the appellant. The Tribunal set aside the impugned order, allowing the appeal with consequential reliefs.

---

---

Issues Involved:
1. Whether the activities undertaken by the appellant amount to "manufacture" under Chapter Note 9 to Chapter 28 of CETA, 1985.
2. Whether the extended period for issuing the show cause notice is applicable.

Summary:

1. Manufacture under Chapter Note 9 to Chapter 28 of CETA, 1985:
The appellant is involved in refilling gases from bulk packages into retail cylinders and mixing gases, which the department contends amounts to "manufacture" under Chapter Note 9 to Chapter 28 of CETA, 1985. The Tribunal examined whether these activities constitute "manufacture" by considering past judgments and Board Circulars.

- Repacking from Bulk Packs to Retail Packs: The Tribunal referred to the case of Ammonia Supply Co. Vs. CCE, New Delhi, which established that transferring gases from tankers to smaller cylinders does not amount to repacking from bulk packs to retail packs. This was supported by Board Circulars clarifying that such activities do not constitute "manufacture."

- Labelling or Relabelling: The Tribunal noted that labelling for identification purposes does not render the product marketable. The labelling done by the appellant was for compliance with the Explosives Act and for identification of returnable cylinders, not for enhancing marketability.

- Adoption of Any Other Treatment to Render the Product Marketable: The Tribunal found that mixing gases like Argon and Carbon dioxide, which do not chemically react to form a new product, does not amount to "manufacture." The gases retain their individual properties and are already marketable in their original form. This view was supported by the Supreme Court in the case of CCE Vs. Goyal Gases (P) Ltd. and others.

2. Extended Period for Issuing Show Cause Notice:
The Tribunal held that the extended period for issuing the show cause notice was not applicable as there was no suppression of facts by the appellant. The department was aware of the appellant's activities, and the issue had been previously decided in favor of the appellant by various courts, including the Supreme Court. The Tribunal concluded that the issue was interpretational in nature, and no positive act of suppression was established against the appellant.

Conclusion:
The Tribunal set aside the impugned order, holding that the activities undertaken by the appellant do not amount to "manufacture" under Chapter Note 9 to Chapter 28 of CETA, 1985. The appeal was allowed with consequential reliefs.

---