TMI Blog2012 (12) TMI 503X X X X Extracts X X X X X X X X Extracts X X X X ..... is an application under Section 35F of the Central Excise Act, 1944 whereby the appellant seeks waiver of the condition of pre-deposit of duty demand amounting to Rs. 3,17,82,267/- with interest and equal amount of penalty. 2. The appellant is engaged in the marketing of hydrogen gas cylinders. The unit of the appellant is adjacent to the manufacturing unit of SIEL Chemical Complex, Rajpura. M/s. SIEL Chemical Complex, Rajpura is engaged in the manufacture of hydrogen gas. The appellant receives 99.9% pure hydrogen gas from SIEL through pipeline at a pressure of 1000 to 1200 mmwc. This gas is filled in returnable gas cylinders with identification marking of the appellant and sold to various consumers. Filling process is done with the aid of filter, dehydration and compressor. 3. Earlier the appellant was registered with the excise department as manufacturer of excisable goods. In the year 2006, the appellant came to know that some other persons engaged in the filling and marketing of gas cylinders were not paying excise duty to the department and they were registered with excise department only as traders in excisable goods. 4. The appellant thus wrote a letter dated 23-11-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r two units at Nangal, which were not paying excise duty. Since our unit is also operating on similar lines but attached to M./s. Siel Chemical Complex, we also wish to surrender our Licence of manufacture wish to take a trading Licence in the Hydrogen Gas so that we are fully competitive with respect to other suppliers of Hydrogen Gas. We respectfully seek your confirmation in the above matter so that we can surrender our Licence for manufacture of Hydrogen at an early date and take on our activity as trader in Hydrogen. Please confirm. 5. In response to the above referred letter dated 23-11-2006 of the Noticee, the Superintendent, Central Excise, Range II, Rajpura vide letter C.No. CE20/surrender of RC/Surya/R-II/81/06/1792 dated 23-11-2006 wrote to the noticee as under :- Section Note 9 of Chapter 28 states that in relation to products of this Chapter, labelling or relabelling of containers and repacking 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. You are requested to confirm whether you fall under the purview of the above mentioned Section Note 6. With refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as filling gas cylinders with the aid of compressor and filter and was marketing these gas cylinders by putting his mark on the same. Thus, the department was right in invoking the extended period of limitation. 11. On limitation, we find merit in the contention of the learned Counsel for the appellant. On perusal of the correspondence exchanged between the parties, which is reproduced in para 3 4 above it is evident that the department was aware of all the fact and circumstances and the appellant did not conceal anything from the department. Thus, in our view, prima facie there appears to be no justification of invoking extended period of limitation under proviso to Section 11A of Central Excise Act, 1944. 12. Coming to the second issue raised by the learned Counsel for the appellant that he has drawn our attention to chapter note 9 of Chapter 28 which is reproduced thus : 9. In relation to products of this Chapter, labelling or relabelling of containers or repacking from bulk packs to retail packs or the adoption of any other treatment to render the product marketable to the customers, shall amount to manufacture. 13. Referring to the aforesaid provision, the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us: 6. What has been overlooked by the appellant is that merely packing for being marketed would not do. The repacking would have to be from bulk packs to retail packs so as to render the product marketable directly to the consumer. There is no evidence relied upon by the appellants to the effect that the cardboard boxes in which the units were placed or the thermocole containers were retail packs . This judgment was reiterated by the Supreme Court in the matter of C.C.E., Mumbai v. BOC (I) Ltd. (supra). 17. In the instant case, undisputedly, M/s. SIEL Chemical Complex, Rajpura are manufacturer of hydrogen gas in bulk. From bulk production the gas is supplied to the appellant through pipeline whereby they fill the gas in small cylinder for marketing to the consumer. This process, in our view, prima facie amounts to repacking of bulk gas in small packs i.e. cylinders after receiving the same from bulk hydrogen gas through pipeline, therefore, applying the principle laid down by the Supreme Court and going by the Chapter Note 9 of Chapter 28, in our view, this amounts to process of manufacture. 18. The appellant has strongly relied upon the judgment of the Tribunal in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the cylinders. They had permission from the Explosive Authority to manufacturer such cylinders in compliance with the direction given by those authorities. They were having colour coated to the cylinders as they were to carry Ammonia. These activities of the manufacturer of cylinders cannot be taken as activity undertaken by the assessee. 19. We agree with the legal principle culled out in the above judgement. However, we do not agree with the factual analysis in the aforesaid order of the Tribunal. We fail to appreciate as to how the coordinate bench of the Tribunal came to the conclusion that filling of liquid ammonia from tanker into smaller cylinders does not amount to repacking of gas from bulk packing. Similarly, other judgments of the Tribunal cited by the learned Counsel for the appellant are not applicable to the peculiar facts of the case. 20. In view of the discussion above, we find that the appellant has been able to make out a prima facie case so far as question of limitation is concerned. Otherwise on merits, we do not find prima facie case for waiver of condition of pre-deposit. As per the appellant the amount of excise duty payable in respect of the goods cleare ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
