2025 (2) TMI 370 - AT - Central Excise

Process amounting to manufacture or not - process undertaken by the appellant on the received gas - recovery with interest and penalty - HELD THAT - The issue involved in the present case is identical as was involved in the earlier appeal of the appellant decided by this Tribunal in M/S. SURYA AIR PRODUCTS PVT. LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE ST CHANDIGARH 2018 (5) TMI 1450 - CESTAT CHANDIGARH . The decision of this Tribunal for the earlier period has been upheld by the Hon ble Apex Court in COMMISSIONER OF CENTRAL EXCISE AND S.T. CHANDIGARH VERSUS M/S. SURYA AIR PRODUCTS PVT. LTD. 2024 (7) TMI 1312 - SC ORDER where it was held that In the instant case the process involved is that the gas received by the appellant through the pipeline has some accumulation of moisture and in order to remove the same from the gas the compressor has an inbuilt system of drying the moisture. The treatment employed by the respondent-herein is oil filtration for the removal of moisture from gas by drying the inbuilt system of compressing gas into the cylinders. The said process in our view does not amount to a manufacturing process. Conclusion - The appellant s process of preparing the gas cylinders for sale did not amount to manufacturing under the Central Excise Tariff Act. The impugned order is not sustainable in law and is set aside - appeal allowed.

Summary

The present appeal before the Appellate Tribunal CESTAT Chandigarh was directed against an Order-in-Original passed by the Commissioner of Central Excise Chandigarh, confirming a demand for Central Excise Duty, interest, and imposing a penalty on the appellant, M/s Surya Air Products (P) Ltd. The appellant, engaged in the marketing of Hydrogen Gas Cylinders, received pure hydrogen gas from another manufacturing unit, filled it in gas cylinders, and sold it to consumers. The issue revolved around whether the process undertaken by the appellant on the received gas amounted to manufacture under the Central Excise Tariff Act.The appellant had surrendered its manufacturer's registration and obtained registration as a dealer after realizing that other gas cylinder fillers were not paying excise duty. The Revenue alleged that the appellant's process constituted manufacture, leading to the issuance of a show cause notice and subsequent confirmation of the demand by the Commissioner, prompting the present appeal.In the hearing, the appellant's counsel argued that the impugned order was unsustainable, citing a previous Tribunal decision and a subsequent Apex Court judgment that held the appellant's process did not amount to manufacture. The Revenue, represented by the Authorized Representative, reiterated the findings of the impugned order.After considering the submissions and reviewing the previous Tribunal decision and the Apex Court judgment, the Tribunal found that the issue in the present case mirrored that of the earlier appeal, which had been upheld by the Apex Court. The Tribunal referenced the Apex Court's findings that the appellant's process of filtering and drying the received gas did not constitute a manufacturing process. Consequently, the Tribunal held that the impugned order was not sustainable and set it aside, allowing the appeal of the appellant.In conclusion, the Tribunal's decision was based on the precedent set by the Apex Court in the appellant's earlier case, affirming that the appellant's process of preparing the gas cylinders for sale did not amount to manufacturing under the Central Excise Tariff Act. The appeal was allowed, and the impugned order was set aside, providing consequential relief to the appellant as per the law.