2004 (8) TMI 189 - AT - Central Excise

Summary

Issues involved:
Whether the activities of the respondents amounted to manufacture under Chapter Note 10 of Chapter 28 of the CETA.
Whether the extended period of limitation can be invoked due to suppression of facts by the respondents.

Analysis:

Issue 1: Activities amounting to manufacture
The appeal was filed by the Revenue against the order-in-appeal where the Commissioner reversed the order-in-original confirming duty demand and penalty on the respondents engaged in the manufacture of gases. The key question was whether the activities of conducting tests on purchased Helium gas cylinders and segregating them into different grades for sale amounted to manufacture under Chapter Note 10 of Chapter 28 of the CETA. The adjudicating authority held it did, while the Commissioner (Appeals) disagreed. The respondents argued that no relabelling was done as the gas was marketable when purchased. However, the Tribunal found that the tests conducted by the respondents, resulting in different grades and prices, rendered the gas marketable to various consumers. The issuance of certificates along with cylinders was considered as relabelling, aligning with Chapter Note 10.

Issue 2: Extended period of limitation
The respondents raised the issue of limitation, arguing that the demand period was time-barred as the notice was served after a significant delay. However, the Tribunal invoked the extended period of limitation due to suppression of facts by the respondents. It was noted that the respondents failed to disclose their activities related to Helium gas cylinders, despite being aware of the manufacturing implications. The plea of ignorance of the law was rejected, and the extended limitation period was deemed rightfully invoked.

In conclusion, the Tribunal held that the activities of the respondents amounted to manufacture under Chapter Note 10 of Chapter 28 of the CETA. The order-in-appeal was set aside, and the original order confirming duty demand, penalty, and interest was restored and confirmed. The appeal of the Revenue was accepted based on the findings related to the manufacturing activities and the invocation of the extended period of limitation due to suppression of facts by the respondents.