Manufacture under excise tariff notes: compressing hydrogen gas into cylinders for industrial use did not create a new marketable product.

Compressing hydrogen gas received through a pipeline into cylinders and affixing a trademark was analysed under the tariff notes and the definition of manufacture to determine whether the process made the gas marketable within Chapter Note 9 to Chapter 28 of the Central Excise Tariff Act, 1985. The commentary follows prior Tribunal reasoning that "consumer" in the note does not include an industrial user buying goods for further industrial use. As the gas was already marketable in its original form, mere compression and cylinder filling did not create a new product or render a non-marketable product marketable, and the activity was treated as not amounting to manufacture for central excise purposes.

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Issues: Whether compressing hydrogen gas received through a pipeline into cylinders and affixing the appellant's trademark amounted to manufacture so as to attract central excise duty under the tariff notes.

Analysis: The activity was examined in the light of the relevant tariff notes and the definition of manufacture. The controlling question was whether the process undertaken by the appellant rendered the gas marketable to the consumer within the meaning of Chapter Note 9 to Chapter 28 of the Central Excise Tariff Act, 1985. The reasoning adopted in earlier decisions of the Tribunal was followed, including the view that the expression "consumer" in the tariff note does not extend to an industrial user or manufacturer purchasing the goods for further industrial use. The gas was already marketable in its original form, and the process of compressing it into cylinders did not create a new product or make a non-marketable product marketable.

Conclusion: The activity did not amount to manufacture and no central excise duty was payable on that basis.

Ratio Decidendi: Where goods are already marketable and are supplied to industrial users, mere compression and filling into cylinders does not constitute manufacture under the tariff note merely because it renders the goods suitable for such industrial use.

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