2000 (5) TMI 288 - AT - Central Excise

Summary

Issues:
1. Claim for refund of CV duty on imported Helium.
2. Whether the process of extraction of Helium amounts to manufacture.
3. Applicability of Central Excise duty on imported Helium.

Analysis:

1. Claim for refund of CV duty on imported Helium:
The appellants imported Helium gas and paid CVD under CET Sub-heading 2804.90. They filed a claim for refund of CV duty, arguing that the imported Helium was not manufactured in India and that the process of bottling it into cylinders did not amount to manufacturing under Section 2(f) of the Central Excise Act. The claim was based on the assertion that Helium was mostly imported from the USA in its natural form and did not undergo any manufacturing process. However, the refund claim was rejected by the Assistant Collector and upheld by the Commissioner (Appeals), leading to the appeal before the Tribunal.

2. Whether the process of extraction of Helium amounts to manufacture:
The Tribunal examined the process of extracting Helium from natural gas, which contains various gases including Helium, carbon dioxide, Methane, and Nitrogen. The Tribunal referred to authoritative sources such as the Condensed Chemical Dictionary and Collier's Encyclopaedia to establish that the extraction of Helium involved a process of refining and purification, which constituted manufacturing. The Tribunal held that the extraction of Helium from natural gas qualified as a manufacturing process, distinguishing it from cases where mere separation of components did not amount to manufacturing.

3. Applicability of Central Excise duty on imported Helium:
The Tribunal considered the classification of Helium as a rare gas or noble gas, which falls under Chapter Heading 28.04 of the Central Excise Tariff. By referring to scientific definitions and case law, the Tribunal concluded that Helium, being an inert gas, qualified for inclusion in the category of rare gas under the Tariff. Consequently, the Tribunal upheld the levy of CV duty on the imported Helium, as it fell under the purview of Central Excise duty.

In conclusion, the Tribunal ruled in favor of the respondents, holding that the appellants correctly paid CV duty on the imported Helium, and upheld the rejection of the refund claim. The judgment clarified that the process of extracting Helium from natural gas constituted a manufacturing process, and that Helium, being classified as a rare gas, was subject to Central Excise duty upon importation into India.