Custom, Excise & Service Tax Tribunal
Goyal Mg Gases Pvt Ltd vs Ludhiana on 21 July, 2025
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
CHANDIGARH
REGIONAL BENCH - COURT NO. I
Excise Appeal No. 60298 of 2023
[Arising out of Order-in-Appeal No. CHD/EXCUS-001-LDH/APP-94-2022-23 dated
22.03.2023 passed by the Commissioner (Appeals), CGST, Ludhiana]
M/s Goyal MG Gases Pvt. Ltd. ......Appellant
Opp. PACL, Naya Nangal, Rupnagar,
Punjab-140126
VERSUS
Commissioner of Central Excise and ......Respondent
Service Tax, Ludhiana Central Excise House, Ludhiana, Punjab-141001 WITH
2. Excise Appeal No. 60299 of 2023 [M/s Goyal MG Gases Pvt. Ltd.]
3. Excise Appeal No. 60300 of 2023 [M/s Goyal MG Gases Pvt. Ltd.]
4. Excise Appeal No. 60301 of 2023 [M/s Goyal MG Gases Pvt. Ltd.] APPEARANCE:
Shri Pawan Kumar Pahwa, Advocate for the Appellant Ms. Amita Gupta, Authorized Representative for the Respondent CORAM: HON'BLE MR. S. S. GARG, MEMBER (JUDICIAL) HON'BLE MR. P. ANJANI KUMAR, MEMBER (TECHNICAL) FINAL ORDER NO. 60874-60877/2025 DATE OF HEARING: 14.07.2025 DATE OF DECISION: 21.07.2025 2 E/60298/2023 & 03 others P. ANJANI KUMAR:
M/s Goyal M G Gases Pvt. Ltd. are engaged in receiving hydrogen gas through a pipeline from M/s Punjab Alkalies and Chemicals Pvt. Ltd. and filling the same by compressing into cylinders which are supplied to various consumers, who are manufacturers of vanaspati ghee; Revenue was of the opinion that the activity undertaken by the appellants amount to manufacture and does they are liable to pay central excise duty as applicable. Revenue issued the first show cause notice dated 14.03.2013 covering the period July 2012 - December 2012; thereafter, statements under Section 11A (7A) were being regularly issued. These four appeals pertain the statements issued for the period June 2014 - June 2017. The show cause notice proceedings were vacated by the Order-in-Original dated 08.01.2021. On an appeal preferred by the Revenue, Commissioner (Appeals) vide Order dated 28.03.2023 confirmed the demands.
2. Shri Pawan K. Pahwa, Learned Counsel for the appellants, submits that the issue is no longer r res integra having been decided by this Bench, in respect of the proceedings initiated by the initial show cause notice and the statements dated 08.01.2014 and 14.07.2014 for the periods January 2013 to June 2013 and July 2013 to December 2013, in favour of the appellants vide Final Order No. A/60956-60957/2016 dated 13.07.2016. He also submits that Delhi and Chennai Benches of the Tribunal have decided the very same issue in respect of the appellants themselves vide 2016 (1) TMI 1055- CESTAT- New Delhi and 2023 (8) TMI 936 (CESTAT Chennai).
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3. Ms. Amita Gupta, learned Authorized Representative for the Revenue submits that as per Chapter Note 9 to Chapter 28 under Section VI of Central Excise Tariff Act, 1985 labelling or re-labelling of containers or re-packing from bulk packs to retail packs or adoption of any other treatment to render the product marketable to the consumer shall amount to manufacture. However, she fairly submits that as submitted by the learned Counsel for the appellants, the issue has been decided by this Bench in favour of the appellants; appeal filed by the Revenue against such order was dismissed as withdrawn by the Hon'ble Apex Court while keeping the question of law open.
She relies on Air Liquide North India Pvt. Ltd. - 2011 (271) ELT 321 (SC) and Fitrite Packers - 2015 (324) ELT 625 (SC) and submits that the processes undertaken by the appellants in compressing the hydrogen gas received from Punjab Alkalies and Chemicals Pvt. Ltd.
into cylinders and affixing their trademark and selling to the manufacturers of Vanaspati ghee amounts to manufacture. She submits that as Hon'ble Apex Court has kept the issue open on merits, this Bench may take appropriate decision keeping in view the chapter note and the decisions cited above.
4. Heard both sides and perused the records of the case. We find that multiple Benches of the Tribunal have decided the issue in favour of the appellants. We find that in the appellant's own case, the Principal Bench of the Tribunal (supra) held as under:
6. In this case before going to frame the issue we are recording the activity undertaken by the appellant which is as under :
4 E/60298/2023 & 03 others The appellant is receiving Hydrogen Gas through pipeline. They compress it and fill it into cylinders at required pressure with the help of compressor run with the aid of power and it is known as compressed hydrogen gas in cylinders. The compressors installed in the premises compresses the gas at different pressure and finally at the pressure 140kg/cm for filing into cylinders each compressor is oil lubricated. In order to avoid passage of oil into gas the compressors is in-built system of oil filtration. The gas received by the appellant through pipeline has some amount of moisture and in order to remove the moisture from the gas the compressor has in-built system of drying the moisture. The treatment employed by the appellant is oil filtration, removing moisture by gas by drying by the in-built system of compressing pressure gas into the cylinders. The allegation of the Revenue is that this activity renders the product marketable to the consumer. As the gas received by the appellant through pipeline is not usable or consumable. Therefore, the gas received in pipeline is not marketable to the consumer in the state in which it is received by the appellant.
On examining the activity undertaken by the appellant, the issue before us is that "whether the activity of the compressor, oil filtration and removing moisture in gas by drying renders the gas marketable to the consumer" and 5 E/60298/2023 & 03 others consequently in terms of Chapter Note 9 of Chapter 28 of the Central Excise Tariff Act, 1985, the activity of the appellant amounts to manufacture or not.
7. To analyse the issue we have examined the Chapter Note 5 of the Chapter 27 of CETA 85 which is reproduced here as under :
"In relation to natural gas falling under Heading 2711, the process of compression of natural gas (even if it does not involve liquefaction), for the purpose of marketing it as Compressed Natural Gas, for use as a fuel of for any other purpose, shall amount to 'manufacture'."
8. On examining the said Chapter Note 5, in Chapter 27, we find that the process of compressor is also amounts to manufacture. Admittedly, in the case in hand as per Chapter Note 9 of Chapter 28 of the CETA, 1985 the activity of compressor does not amount to manufacture. Now the short issue before us whether the activity undertaken by the appellant rendered the product marketable to the consumer or not.
9. The main thrust of the Ld. AR is that the appellant is engaged in the activity of packing/repacking from bulk to smaller packs. In fact, that is not the case of the department as per the show cause notice. Therefore, the case laws relied upon by the Ld. AR are not relevant to the facts of this case.
10. We have also seen that in the case of Ammonia Supply Company (supra), this Tribunal held that Ammonia gas from bulk packing to smaller container will not amount to manufacturing process. Admittedly, in this case the gas from 6 E/60298/2023 & 03 others pipeline into cylinders is a similar activity and same shall not amount to manufacturing process.
11. Now the only issue remain before us is whether the activity undertaken by the appellant renders the product marketable to the consumer or not. The said issue has been examined by this Tribunal in the case of Shivam Industries (supra) wherein this Tribunal has observed in paras 6 & 7 as under:
"6. There is no dispute about the fact that the appellants purchased duty paid transformer oil in bulk and after filtration and heating used the same for filling the cavities of the transformers being repaired as liquid insulator.
According to the department, this
process would be covered by the
definition of manufacture under Section 2(f)(ii) of Central Excise Act, 1944 read with Chapter Note 4 of Chapter 27 of the Central Excise Tariff.
7. Under Section 2(f)(ii) the manufacture includes any process which is specified in relation to any goods in section or Chapter notes of the 1st Schedule to the Central Excise Tariff Act, 1985 as amounting to manufacture. Chapter Note 4 of the Chapter 27 states that in relation to lubricating oil and lubricating preparations of Heading 2710, labelling or re-labelling of containers or repacking from bulk packs to retail packs or adoption of any other treatment to render the product marketable to the consumer shall amount to manufacture. In our views, the word 'consumer' in the expression 7 E/60298/2023 & 03 others 'adoption of any other treatments to render the product marketable to consumer' would not cover an industrial user or manufacturer who process the transformer oil/lubricants for his own industrial use. In this case, the appellant had subjected the transformer oil purchased by them to the process of filtration and heating to make it suitable for their own industrial use i.e. for repair of the transformers. The process undertaken by the appellant thus, does not amount to manufacture and as such the impugned orders are not sustainable. The same are set aside. The appeals are allowed."
12. We have seen that in the case of Shivam Industries (supra) this Tribunal has observed that the adoption of any other treatment rendered the product marketable to the consumer. Admittedly, in this case the consumers are Vanaspati manufacturers who are industrial users or manufacturers. Therefore, the same will not term as consumer.
13. In fact, they are the processors of the goods. In the case in hand, as the buyer are not consumer as per Chapter Note 9 of Chapter 28 of CETA, 1985. Further, we also hold that the gas is already marketable in its original form and the activity undertaken by the appellant does not render the gas marketable which is already marketable. Therefore, we hold that the activity undertaken by the appellant does not amount to manufacture. Consequently, the appellant are not liable to pay duty.
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5. We find that this Bench vide Final Order cited above relied on the decision of the Principal Bench as above. Though the Hon'ble Apex Court has kept the issue open on merits, there is no stay granted on the operation of the above order. Different Benches of the Tribunal have been holding in favour of the appellants. We are not in agreement with the contentions of the learned Authorized Representative that as the Hon'ble Apex Court has kept the issue open, this Bench can take a different stand on the same issue. It is our considered opinion that when Hon'ble Apex Court keeps an issue open on merits, it means to say that the Hon'ble Apex Court themselves would deliberate on the issue should there be a necessity in the time to come. It does not definitely mean that the same Bench of the Tribunal can take a different view. Therefore, we cannot take a different stand than it was taken in the instance.
6. In the result, all the appeals are allowed with consequential relief, if any, as per law.
(Order pronounced in the open court on 21/07/2025) (S. S. GARG) MEMBER (JUDICIAL) (P. ANJANI KUMAR) MEMBER (TECHNICAL) PK