2004 (4) TMI 338 - AT - Central Excise

Summary

Issues:
Challenge against the order of the Commissioner (Appeals) regarding the process of compressing and bottling Carbon dioxide received from fertiliser units.

Analysis:
The appeal before the Appellate Tribunal CESTAT, CHENNAI involved a challenge against the Commissioner (Appeals) order regarding the manufacturing process of compressing and bottling Carbon dioxide received from various fertiliser units. The period under dispute was from July 1995 to February 1997. The Tribunal thoroughly examined the records and heard arguments from both sides.

Regarding the grounds of appeal, the Revenue contended that Note 10 to Chapter 28 of the Central Excise Tariff Schedule, inserted on 1-5-1997, clarified that certain treatments to products like Carbon dioxide would amount to "manufacture." The Revenue argued that the purification process during compression fell under this category. However, the Tribunal noted that the Chapter Note had prospective effect from 1-5-1997, as acknowledged by the appellant. Therefore, the argument regarding retrospective application was dismissed.

The respondents' counsel relied on a judgment from the Hon'ble High Court of Madras in Tax Case No. 265 of 1990. The High Court's judgment stated that Carbon dioxide, even after compression, remained the same and did not attract taxability under a specific entry. The Tribunal found this judgment relevant, emphasizing that Carbon dioxide retained its identity in commercial terms post-compression. Following the High Court's finding, the Tribunal concluded that the process undertaken by the respondents did not amount to "manufacture" under Section 2(f) of the Central Excise Act. Consequently, the goods in question were deemed non-excisable, affirming the lower order and rejecting the appeal.

In conclusion, the Appellate Tribunal CESTAT, CHENNAI upheld the decision that the process of compressing and bottling Carbon dioxide did not constitute "manufacture" for excise purposes, based on the interpretation of relevant legal provisions and the precedent set by the High Court judgment. The appeal from the Revenue challenging the Commissioner (Appeals) order was dismissed, affirming that the goods in question were not excisable.