LexM/S. AIR LIQUIDE NORTH INDIA PVT. LTD. versus COMMISSIONER, CENTRAL EXCISE, JAIPUR-I
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A B [2011] 13 (ADDL.) S.C.R. 866 MIS. AIR LIQUIDE NORTH INDIA PVT. LTD. v. COMMISSIONER, CENTRAL EXCISE, JAIPUR-I (Civil Appeal No. 43 of 2005) AUGUST 30, 2011 [DR. MUKUNDAKAM SHARMA AND ANIL R. DAVE, JJ.] Central Excise Tariff Act, 1985 - Chapter 28 - C Manufacture - Appellant purchased Helium gas from the market in bulk and repacked the same into smaller cylinders after giving different grades to it and then sold the same in the open market- Whether the treatment given or the process undertaken by the appellant to Helium gas purchased by it D from the open market amounted to manufacture, rendering the goods liable to duty under Chapter Note 10 of Chapter 28 of the Act - Held: If a product/commodity, after some process is undertaken or treatment ir; given, assumes a distinct marketability, different than its original marketability, E then it can be said that such process undertaken or treatment given to confer such distinct marketability would amount to "manufacture" in terms of Chapter note 10 to Chapter 28 of the Act - Appellant purchased Helium gas under a generic description but after the tests and analysis, sold it to different F customers based on their specific requirements at profit margin ranging from 40% to 60% in different cylinders -The various tests resulted into categorization of the gas into different grades - The appellant supplied the gas not as such and under the grade and style of the original manufacturer G but under its own grade and standard - Further, while selling the gas, different cylinders were given separate certificates with regard to the pressure, moisture, purification and quality of the gas - This explains the high price at which the appellant was selling the gas - The Tribunal rightly observed that if no H 866 AIR LIQUIDE NORTH INDIA PVT. LTD. v. COMMISSIONER, 867 CENTRAL EXCISE, JAIPUR-I treatment was given to the gas purchased by the appellant, A customers of the appellant would not have been purchasing Helium from the appellant at a price 40% to 60% above the price at which the appellant was purchasing - Appellant is liable to pay excise duty for the reason that it manufactured Helium within the meaning of the term 'manufacture' as B explained in terms of Chapter Note 10 of Chapter 28 of the Act - Though the Helium purchased by the appellant was in a marketable state but by giving different treatment and purifying the gas, the appellant was manufacturing a commercially different type of gas or a new type of commodity c which would suit a particular purpose - Thus, the treatment given by the appellant to the gas sold by it would make a different commercial product and, therefore, it can surely be said that the appellant was engaged in a manufacturing activity. o The appellant is engaged in the manufacture of Oxygen, Nitrogen, Carbon-di-oxide and other gases classifiable under Chapter 28 of the Central Excise Tariff Act, 1985. The appellant purchased Helium gas from the market in bulk and repacked the same into smaller E cylinders after giving different grades to it and then sold the same in the open market. The adjudicating authorities held that the processes undertaken by the appellants amounted to manufacture and consequently confirmed demand with penalty. The order was set aside by the F Commissioner (Appeals). Thereafter, the respondent- Department filed appeal before the Customs, Excise & Service Tax Appellate Tribunal which allowed the same holding that the process undertaken or the treatment given by the appellant amounted to "manufacture" in G terms of Chapter Note 10 of Chapter 28 of the Act. In the instant appeal, the appellant contended that it had only conducted various tests like moisture test, etc. to determine quality and quantity of Helium gas in the H 868 SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R. A cylinders; and that even after the activity of testing, Helium gas remained as Helium gas only and no new product, other than Helium gas came into existence and, therefore, it cannot be said that the appellant had carried on any manufacturing activity. The appellant further B contended that the gas, when purchased by the appellant, was already marketable and, therefore, the process of testing of the gas by the appellant cannot be said to be a manufacturing process, rendering the product marketable. c The appellant claimed that the issuance of certificate along with the cyl
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