TMI Blog1999 (7) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... ey buy these gases in bulk and repack them in cylinders. 4. By show cause notice dated 6-1-1994, the Department alleged that the activity of mixing of various gases into cylinders result in the emergence of a new product leviable to Central excise duty and since M/s. Goyal Gases Ltd. had undertaken to manufacture such mixtures of gases in their premises and had cleared them in the name of M/s. Peacock Chemical Pvt. Ltd, they had become liable to pay a sum of Rs. 8,59,095.87 representing clearances of 5894 cylinders of mixtures of gases cleared during the period September, 1990 to May, 1991. The show cause notice also proposed imposition of penalty and confiscation of land, building, plant etc. 5. The matter was Adjudicated by the Commissioner of Central Excise, Meerut resulting in the impugned order. 6. Ld. Advocate for the appellants contended before us that the Commissioner s finding that mixing of gases by the appellants amounts to manufacture and therefore excisable, cannot be accepted as legally tenable. Ld. Counsel contended that in most of the cases appellants were mixing only inert gases like argon, crypton, helium, neon etc. which do not react chemically with each ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of duty paid materials, viz. turpentine and Xybl and selling them as auto thinners amounted to manufacture and whether auto thinner was liable excise duty was examined. The Tribunal concluded that the goods had not undergone any process of manufacture and therefore cannot be held liable to duty. Ld. Counsel contended in the light of the aforesaid decisions, that the mixing of gases by the appellants did not result in the emergence of any new commodity having a distinct name, character and identity different from its constitutents. Therefore the impugned order holding that mixing and filling of gas mixture amounted to manufacture was contrary to the law enunciated by the aforesaid decisions and therefore, liable to be set aside. 8. Ld. Counsel also argued that the Department had not substantiated the allegation in the show cause notice that the mixing of two gases had resulted in the emergence of a totally different product which has distinctive use and marketability. The onus for establishing the said averment was on the Department which had not been discharged by them. The Commissioner had only observed that the fact that the appellants are marketing the mixture of gases its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yal Gases were engaged in the process of mixing gases in cylinders. The process of filling the cylinders require specialised jobs like vaccumisation with the help of vaccum pumps, maintenance of a uniform pressure of 140 Kgs by use of compressor, liquid pumps, etc. The mixing undertaken by the appellants M/s. Goyal Gasses were therefore, not a simple activity but a very specialised and technical activity where specialised equipments were used. The mixture of gases put in the cylinder by the appellants M/s. Goyal Gases was a distinct product having distinct uses and different from the unmixed gases. Such mixture of gases is therefore rightly classificable under Chapter sub-heading 2804.90. The fact that the appellants have not given a specific name to the mixture does not by itself make any difference since the gas is no more marketed merely as Nitrogen or Hydrogen, but as a different product. It is also not in dispute that the gases after mixing have different and independent uses. In this connection, he referred to Tribunal s decision in Unique Beauticare Product Pvt. Ltd. v. C.C.E. reported in 1988 (37) E.L.T. 369 in which the Tribunal has held it even in cases where admittedly n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the question whether a particular process does or does not amount to manufacture is always a question of fact to be determined in the facts of a given case applying the principles enenciated in the various decisions of the higher courts and the Tribunal. We find that the appellants have contended that in their case, the mixing of gases had not resulted in the emergence of a new and different product with distinct uses and marketability. From the submissions made and the process of manufacture explained by the appellants, it does appear that the mixing of oxygen/nitrogen with inert gases does not bring about any chemical reaction between the gases and therefore chemical composition had remained the same. This position has not been controverted by the Department. However, the Commissioner has observed that such mixture of gases is a distinct commodity different from the single gas and it results in a distinct product with different uses. The only reason given by the Commissioner for coming to this conclusion is that such process of mixing of gases requires plant and machinery including testing equipments. We observe from the Tribunal decision in Indian Oil Corporation v. C.C.E. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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