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TMI Blog2005 (3) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... activities obtained licenses under the Customs Act and also obtain Registration under Central Excise. They imported Helium Refrigerated liquid (herein after referred to as HRL), converting the liquid form into Diving Helium gas (herein after referred to an DHG) by mixing of 2% oxygen gas after conversion of HRL into gas. The manufacturing process is as follows : (a) (i) Decanting of Helium Refrigerated Liquid from ISO container : Helium Refrigerated Liquid is brought in a very special vacuum insulated ISO Container which is designed specially to store Helium Refrigerated Liquid at a very low temperature of 4.2K. This is done by vacuumising and shielding of jackets with liquid Nitrogen. The liquid as stated above is at a very low temperature. This liquid is passed through a heater called vaporizer where atmospheric heat is circulated in heat exchange with incoming Helium, Refrigerated Liquid (at 4.2K) as a result of which it converts into Helium Gas. This Helium Gas is then passed through a high pressure compressor where the pressure of the Helium gas is raised in stages by the compressor from 0 kg/cm2 to 150 Kgs. cm2 as the pressure is increased in each stage the tempera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f DHG for supply intended for ONGC for the purpose of off-shore exploration or exploitation. Forty such Bills of Entry were filed and goods ex-bonded under physical supervision of Excise Department after assessing Bill of Entries showing the particulars of exemption. On 18-5-2000 they filed a Bill of Entry for de-bonding HRL under claim of the benefit of Notification 16/2000-Cus., dated 1-3-2000 as amended. The same was disallowed and the Show cause notice was issued, proposing the following : (b) (i) that helium gas mixed with 2% oxygen is not a part which is used for manufacture of goods to be supplied for intended purpose; (ii) that similarly helium gas mixed with 2% oxygen is not a raw material as no new finished final product is manufactured. Mixing of gas does not constitute manufacture; (iii) that there is no sale to retailer and therefore not covered by definition of deemed manufacturer as per Chapter Note No. 10 of Chapter No. 28. The show cause notice was replied, the Deputy Commissioner denied the exemption in appeal. The Commissioner (Appeals) came to the following findings :- (c) (i) that HRL is a raw material and activities undertaken for conversion o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee had satisfied all the conditions of Notification No. 16/2000-Cus., as amended vide Notification No. 31/2000-Cus., and it was incorrect to deny the exemption to them. The grounds taken by Revenue in this appeal are : (i) Exemption is not applicable for non fulfilment of the conditions of the said notification as only "parts and raw materials for manufacturing of goods to be supplied in connection with the purpose of off-shore oil exploration or exploitation" and the goods do not conform to the same. (ii) The extension for the bonding period is up to 14-9-2001. The process of 2% Oxygen mixed in Helium (HRL) does not result in new product having different name, nomenclature and end use to come into existence and also no chemical reaction takes place. (iii) Mixing of gases does not amount to manufacture. Section 2(f) of the Central Excise Act refund manufacture and in view of this case of S.C. Commissioner of Central Excise v. M/s. Goyal Gases (P) Ltd. - 2000 (119) E.L.T. 5 (S.C.) wherein it has been held as follows : "The Tribunal has categorically held that no evidence was led by the Department to controvert the assessees case that no new product with distinct us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... permits the owner of any Ware-housed goods to carry on any manufacturing process or other operations in the Warehouse in relation to such goods. This Section also does not relate the interpretation of the word 'manufacture' to the definition under Section 2(f) of the Central Excise Act, 1944 nor do the Manufacture and Other Operations in Warehouse Regulations, 1966 issued in exercise of the powers under Section 157 of the Custom Act, 1962 restrict the interpretation of the word 'manufacture' to Section 2(f) definition under the Central Excise Act, 1944. We therefore, find no reason to conclude that no manufacture in the Customs Warehouse took place when HRL was mixed with 2% Oxygen to achieve DRG for a specific and use i.e. Deep See Diving. (c) The ground urged by Revenue that HRL is not part/component as the benefit is available to all 'raw materials' falling under any chapter of Central Tariff and not restricted to 'parts' as commonly understood and pleaded by Revenue. The ex-bonding as raw material of HRL cannot be found fault with or its use by mixing with 2% Oxygen Gas to result in a commodity different. The Notification exempts raw materials used for manufacture of good ..... X X X X Extracts X X X X X X X X Extracts X X X X
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