2002 (4) TMI 210 - AT - Central Excise

Summary

Issues:
Interpretation of Note 10 of Chapter 28 of Central Excise Tariff regarding labelling and re-labelling of containers leading to the legal fiction of manufacture and levy of excise duty.

Analysis:

Issue 1: Interpretation of Note 10 of Chapter 28 of Central Excise Tariff
The central issue in this case was the interpretation of Note 10 of Chapter 28 of the Central Excise Tariff, specifically focusing on whether affixing labels on cylinders containing Helium gas amounted to manufacturing and attracted excise duty. The Tribunal analyzed the language of Note 10, which states that labelling or re-labelling of containers to render the product marketable constitutes manufacture. The Tribunal referred to previous decisions to interpret this note, emphasizing that the activities mentioned in the note must be strictly complied with to invoke the legal fiction of manufacture. The Tribunal highlighted that the process of labelling or re-labelling should occur when goods are repacked from bulk packs to retail packs. In this case, the Tribunal found that the appellants were not repacking goods from bulk packs to retail packs, as they received Helium in tankers, not bulk packs. Therefore, the activity of filling smaller containers from bulk containers did not fall within the scope of manufacture as per Note 10.

Issue 2: Application of Previous Tribunal Decisions
The Tribunal considered previous decisions, such as the case of Ramkishore Chemicals Co. Pvt. Ltd. and Ammonia Supply Company, to support its interpretation of Note 10. These decisions provided precedents where similar activities did not amount to manufacture under the said note. The Tribunal noted that in the case of Ammonia Supply Company, it was established that labelling or re-labelling should occur during the repacking process from bulk packs to retail packs, which was not the case for the appellants. By aligning with the findings of these previous judgments, the Tribunal concluded that the appellants' activity of affixing labels on cylinders did not constitute manufacture under Note 10 of Chapter 28 of the Central Excise Tariff.

Conclusion:
Based on the detailed analysis of the interpretation of Note 10 and the application of previous Tribunal decisions, the Appellate Tribunal allowed the appeal in favor of the appellants. The Tribunal emphasized that the appellants' actions did not meet the criteria set out in Note 10 for the legal fiction of manufacture to apply. Consequently, the Tribunal ruled that the activity of affixing labels on cylinders containing Helium gas did not attract excise duty as claimed by the Revenue. The judgment provided clarity on the scope of manufacturing activities under the Central Excise Tariff, ensuring compliance with legal provisions and established precedents.