Industrial-use exemption for carbon dioxide failed where cylinder filling and finishing were not treated as qualifying use.

Exemption under Notification No. 40/85 applied only where carbon dioxide was used for industrial purposes and, when used outside the factory of production, the prescribed Chapter X procedure was followed. Filling gas cylinders, sealing them, fitting accessories and painting did not amount to industrial use within the scope of the notification. As those conditions were not satisfied, the exemption was unavailable for carbon dioxide used for sale to customers, and the Revenue's appeal succeeded.

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Issues: Whether the exemption under Notification No. 40/85 dated 13-3-1985 was available for carbon dioxide used in filling gas cylinders for sale to customers.

Analysis: The notification granted exemption only where the gas was used for industrial purposes and, where used elsewhere than in the factory of production, the prescribed Chapter X procedure was followed. The process undertaken by the respondents, namely filling cylinders, sealing, fitting accessories and painting, did not amount to industrial use of the gas. The use was not for the purpose contemplated by the exemption and the conditions of the notification were not satisfied.

Conclusion: The exemption was not available to the respondents and the appeal by the Revenue succeeded.

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