2005 (8) TMI 427 - AT - Central Excise

Summary

Issues:
1. Whether filling oxygen gas into cylinders amounts to manufacture under Section 2(f) of Central Excise Act, 1944.
2. Whether the activity of filling oxygen gas into cylinders is subject to excise duty.

Analysis:
1. The first issue in this case revolves around whether the activity of filling oxygen gas into cylinders constitutes "manufacture" under Section 2(f) of the Central Excise Act, 1944. The Commissioner (Appeals) allowed the appeal, stating that the activity does not amount to manufacture as the oxygen gas remains unchanged in its chemical composition. The Revenue, in their appeal, argued that the process of re-packing oxygen gas into cylinders makes it a different product commercially, thus subject to duty. However, the Tribunal, after considering both arguments, upheld the decision of the Commissioner (Appeals). The Tribunal concluded that filling oxygen gas into cylinders does not result in a different excisable commodity, and therefore, does not meet the criteria for levying excise duty as per the Central Excise Act, 1944.

2. The second issue pertains to whether the activity of filling oxygen gas into cylinders should be subject to excise duty. The Revenue contended that since the oxygen gas is re-packed in unit containers and sold in the market under the name "oxygen gas" in cylinders, it should be considered a different product and duty should be imposed. However, the Tribunal disagreed with this argument. The Tribunal noted that the oxygen gas, which is brought to the premises through a pipeline for packing, has already been subjected to duty. Merely filling the gas into cylinders does not alter its nature to the extent that it becomes a different excisable commodity warranting a second round of excise duty. Consequently, the Tribunal found no merit in the Revenue's appeal and rejected it, affirming that the activity of filling oxygen gas into cylinders does not attract excise duty.

In conclusion, the Appellate Tribunal, CESTAT, Mumbai, held that the process of filling oxygen gas into cylinders does not amount to manufacture under the Central Excise Act, 1944, and does not warrant the imposition of excise duty as the nature of the product remains unchanged.