Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs M/S Sanghi Oxygen (Bombay) Pvt. Ltd on 30 August, 2013
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. I Appeal No. E/3347/04 (Arising out of Order-in-Appeal No. CPA/77/M-IV/2004 dated 14.9.2004 passed by the Commissioner of Central Excise (Appeals), Mumbai-IV). For approval and signature: Honble Shri P.R. Chandrasekharan, Member (Technical) Honble Shri Anil Choudhary, Member (Judicial) ======================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it should be released under Rule 27 of the : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair copy : Seen of the order? 4. Whether order is to be circulated to the Departmental : Yes authorities? ====================================================== Commissioner of Central Excise, Mumbai-IV Appellant Vs. M/s Sanghi Oxygen (Bombay) Pvt. Ltd. Respondent Appearance: Shri Navneet, Addl. Commissioner (AR) for Appellant Shri Prakash Shah, Advocate for Respondent CORAM: SHRI P.R. CHANDRASEKHARAN, MEMBER (TECHNICAL) SHRI ANIL CHOUDHARY, MEMBER (JUDICIAL) Date of Hearing: 30.08.2013 Date of Decision: 30.08.2013 ORDER NO. Per: P.R. Chandrasekharan
This appeal filed by the Revenue is directed against Order-in-Appeal No. CPA/77/M-IV/2004 dated 14.9.2004 passed by the Commissioner of Central Excise (Appeals), Mumbai-IV .
2. The respondent, M/s Sanghi Oxygen (Bombay) Pvt. Ltd., Andheri, Mumbai are manufacturers of goods falling under Chapter 28 of Central Excise Tariff Act, 1985. The respondent purchased Argon Gas falling under Chapter 28 of the Central Excise Tariff Act, 1985 in tankers from M/s RCF Ltd. and others and unloaded the gas into tanks in the factory and thereafter filled the gas into cylinders. Till 31.3.2002, they were discharging Central Excise duty liability on the Argon Gas filled in cylinders. After the decision of the Tribunal in the case of Ammonia Supply Co. 2001 (131) ELT 626 (Tri-Del), wherein it was held that refilling of gas from tankers to cylinders would not amount to manufacture, was known, the respondent claimed that they were not liable to pay excise duty. Therefore, a show-cause notice dated 17.6.2003 was issued demanding excise duty of Rs.6,68,494/- for the period April, 2002 to March, 2003 along with interest thereon and also proposing to impose penalty. The notice was adjudicated and the proceedings were dropped on the finding that the activity carried out by respondent did not amount to manufacture. The Revenue filed an appeal against the said decision before the lower appellate authority who also came to the same conclusion and accordingly, dismissed the departmental appeal relying on the decision of this Tribunal in the case of Ram Kishore Chemicals Co. P. Ltd. Vs. Commissioner of Central Excise, New Delhi 2002 (145) ELT 106 (Tri-Del) and BOC (I) Ltd. Vs. Commissioner of Central Excise, Mumbai-VII 2002 (510 RLT 996. Aggrieved of the same, the Revenue is before us.
3. It has been urged in the memorandum of appeal that as per Note 10 of Chapter 28 in relation to products of this chapter, labeling or re-labeling of containers and re-packing from bulk packs to retail packs or the adoption of any other treatment to render the product marketable to the consumer, shall amount to manufacture. As per the clarification issued by the CBE&C vide Circular No. 342/58/97-CX dated 8.10.1997, the expression packing is considered as a package containing a pre-packed commodity and the quantity of product contained therein is also pre-determined. It is done without the purchaser being present. The packages also contain information such as name of the manufacturer, quantity, value and other details of the product. Therefore, as per the said clarification, the activity undertaken by the respondent would amount to manufacture. Therefore, the orders passed by the adjudicating authority and the appellate authority are bad in law and needs to be set aside.
4. The learned Addl. Commissioner (AR) appearing for the Revenue reiterates the grounds urged in the appeal memorandum and also submits that the cylinders appellant used for re-filling are bearing the name Sanghi Oxygen that has been inscribed by punching the same onto the cylinders and this fact has not been considered in the impugned orders. He also relies on the decision of the Tribunal in the case of Surya Air Products Pvt. Ltd. 2012 (283) ELT 107 (Tri-Del). , wherein at the stage of grant of stay, it was held that refilling of Hydrogen Gas from bulk to small cylinders for marketing to consumer amounted to manufacture. Therefore, he submits that either the matter be remanded back for fresh consideration or the impugned order be set aside.
5. The learned Counsel for the respondent submits that the appellant does not undertake the activity specified in Note 10 of Chapter 28. They are not at all labeling or re-labeling the cylinder. Merely because they have filled the gas from tanks to the small cylinders, it does not mean that they are undertaking re-labeling or re-packing. The containers in which they are refilling the gas are returnable and, therefore, to maintain the identity of the cylinder, they have put the name of the assessee Sanghi Oxygen on the cylinder. Some times they also get cylinders from their buyers in which they fill the gas and send back the cylinders to the buyers. Merely because the gas has been filled into the cylinder from the tanks, it does not mean that the appellant has undertaken repacking from bulk pack to retails pack and, therefore, it is contended that the impugned orders are sustainable in law and appeal deserves to be set aside.
6. We have carefully considered the submissions made by both the sides.
6.1 As per Note 10 of Chapter 28 as it stood at the relevant time, two requirements were needed to be satisfied. One, there should labeling or re-labeling of the container and second repacking from bulk packs to retail packs. When both these conditions are satisfied, the activity would amount to manufacture. In the present case, on perusal of the show-cause notice and the order passed by the lower appellate authority, nowhere it is coming out that the appellant has done labeling and re-labeling on the gas cylinder. It is also seen that in many cases, the gas has been supplied by the appellant in the buyers cylinders. If that be so, the question for re-packing from bulk pack to retail pack would not arise. We find that the decision of the Tribunal, in the case of Ammonia Supply Co. (supra) would apply to the facts of the present case and the activity would not amount to manufacture. The reliance placed upon the decision of the Tribunal in the case of Surya Air Products Pvt. Ltd. (supra) is also of no help to the Revenue, because it is only a prima facie view taken at the interim stage of stay and it is a settled position in law that interim decision cannot be considered as a precedent.
7. In view of the above, we do not find any infirmity in the order passed by the lower appellate authority and accordingly, we dismiss the appeal filed by the Revenue as devoid of merits.
(Dictated and pronounced in Court)
(Anil Choudhary) (P.R. Chandrasekharan)
Member (Judicial) Member (Technical)
Sinha
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