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2023 (8) TMI 936 - AT - Central ExciseProcess amounting to manufacture - activity of refilling Oxygen and Argon gases from bulk packages into retail cylinders and selling them to industrial consumers - Time limitation - HELD THAT - From the definition of 'manufacture' it can be seen that as per 2(f)(ii) the definition includes certain 'deemed manufacture' as envisaged in Sections and Chapter Notes of CETA, 1985. Chapter Note 9 to Chapter 28 (which has been already reproduced) thus gives situations when certain activities in relation to goods falling under Chapter 28 are deemed to be manufacture of goods so as to attract the levy of Central Excise duty. In the appellant's own case, the issue came up for consideration in GOYAL M.G. GASES PVT. LTD. VERSUS COMMISSIONER OF C. EX. S.T., CHANDIGARH 2016 (1) TMI 1055 - CESTAT NEW DELHI , where the Tribunal after considering the application of Chapter Note 9 to Chapter 28 held that the activity does not amount to 'manufacture'. After appreciating the facts and following the decisions, it is opined that the department has failed to establish that the activities undertaken by the appellant amount to 'manufacture'. The appellant succeeds on merits of the case. Time Limitation - HELD THAT - The SCN has been issued invoking extended period. There were decisions in favour of the appellant and their request to surrender the registration of manufacture was also accepted by the department. Further the issue is purely interpretational in nature. No positive act of suppression has been established against the appellant - there are no grounds for invoking the extended period. The issue on limitation is also answered in favour of appellant. The impugned order is set aside. The appeal is allowed.
Issues Involved:
1. Whether the activities undertaken by the appellant amount to "manufacture" under Chapter Note 9 to Chapter 28 of CETA, 1985. 2. Whether the extended period for issuing the show cause notice is applicable. Summary: 1. Manufacture under Chapter Note 9 to Chapter 28 of CETA, 1985: The appellant is involved in refilling gases from bulk packages into retail cylinders and mixing gases, which the department contends amounts to "manufacture" under Chapter Note 9 to Chapter 28 of CETA, 1985. The Tribunal examined whether these activities constitute "manufacture" by considering past judgments and Board Circulars. - Repacking from Bulk Packs to Retail Packs: The Tribunal referred to the case of Ammonia Supply Co. Vs. CCE, New Delhi, which established that transferring gases from tankers to smaller cylinders does not amount to repacking from bulk packs to retail packs. This was supported by Board Circulars clarifying that such activities do not constitute "manufacture." - Labelling or Relabelling: The Tribunal noted that labelling for identification purposes does not render the product marketable. The labelling done by the appellant was for compliance with the Explosives Act and for identification of returnable cylinders, not for enhancing marketability. - Adoption of Any Other Treatment to Render the Product Marketable: The Tribunal found that mixing gases like Argon and Carbon dioxide, which do not chemically react to form a new product, does not amount to "manufacture." The gases retain their individual properties and are already marketable in their original form. This view was supported by the Supreme Court in the case of CCE Vs. Goyal Gases (P) Ltd. and others. 2. Extended Period for Issuing Show Cause Notice: The Tribunal held that the extended period for issuing the show cause notice was not applicable as there was no suppression of facts by the appellant. The department was aware of the appellant's activities, and the issue had been previously decided in favor of the appellant by various courts, including the Supreme Court. The Tribunal concluded that the issue was interpretational in nature, and no positive act of suppression was established against the appellant. Conclusion: The Tribunal set aside the impugned order, holding that the activities undertaken by the appellant do not amount to "manufacture" under Chapter Note 9 to Chapter 28 of CETA, 1985. The appeal was allowed with consequential reliefs.
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