2011 (6) TMI 482 - AT - Central Excise

Demand - Classification - Whether labeling or re-labeling of containers or repacking from bulk packs to retail packs or the adoption of any other treatment to render the product marketable to the consumer, shall amount to manufacture in relation to products of Chapter 28 - in the case of Ammonia Marketing Co. Vs. CCE, Bangalore (2001 -TMI - 50629 - CEGAT, SOUTH ZONAL BENCH, BANGALORE) held that filling of ammonia gas from bulk tankers into smaller cylinders would not amount to manufacture and therefore, no duty liability under the Central Excise Act is attracted - Appeal is dismissed

Summary

Issues:
1. Whether the activity of offloading ammonia from bulk tankers and filling it in retail cylinders amounts to manufacture under Chapter 28 of the CETA 1985.

Detailed Analysis:
The appeal before the Appellate Tribunal CESTAT, Mumbai was against the order-in-appeal passed by the Commissioner of Central Excise (Appeals), Mumbai-VI. The case involved M/s. Ammonia Supply Co., Thane, engaged in manufacturing Liquor Ammonia falling under Chapter 28 of the CETA 1985. The department contended that the offloading and filling activity constituted manufacture under Chapter Note 10 to Chapter 28, demanding duty of Rs.4,33,665. The Assistant Commissioner initially ruled that the activity did not amount to manufacture. On appeal, the Commissioner (Appeals) upheld this decision, leading to the department's appeal before the Tribunal.

The department's main argument was based on Chapter Note 10 to Chapter 28, which states that certain activities like labeling, re-labeling, or repacking from bulk to retail packs amount to manufacture. The department argued that since ammonia was being filled into cylinders from tankers, it constituted manufacture under this provision. However, the Tribunal analyzed the facts and legal provisions. It noted that in the present case, there was no labeling, re-labeling, or rendering the product marketable involved. The Tribunal emphasized that tankers cannot be considered packages, and filling them into cylinders did not qualify as repacking. Referring to a previous case, the Tribunal cited that filling ammonia gas from bulk tankers into smaller cylinders was not considered manufacture, leading to no duty liability under the Central Excise Act.

Ultimately, the Tribunal found that the precedent set in the previous case applied directly to the current situation. As a result, the Tribunal dismissed the appeal, stating that filling ammonia from tankers into cylinders did not amount to manufacture under Chapter 28. The judgment was pronounced in court, upholding the decision that no duty liability was attracted in this scenario.