TMI Blog2016 (12) TMI 814X X X X Extracts X X X X X X X X Extracts X X X X ..... stion is answered in favour of the assessee - Income Tax Appeal No. 224 of 2014 - - - Dated:- 8-12-2016 - Hon'ble Bharati Sapru And Hon'ble Vinod Kumar Misra, JJ. For the Appellant : Shubham Agrawal For the Respondent : C.S.C. It,Ashok Kumar ORDER Heard Shri Udit Chandra, learned counsel for the appellant and Shri Udit Chandra, learned counsel for the department. This appeal has been filed by the assessee under Section 260A of the Income Tax Act, 1961 against the order passed by the Tribunal dated 13.06.2014 for the assessment year 2008-09. The question of law sought to be answered is as under: Whether the compressed natural gas produced by the appellant, having different name, character and use from na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The manufacturing, storage and dispensing of compressed natural gas (CNG) can only be started after the grant of license by the Petroleum Explosive Saftey Organization. The Rule 2(viii) of the Gas Cylinder Rules, 2004 defines, compressed natural gas' as mixture of hydro carbon gases and fibres consisting mainly of Methane in gaseous form which has been compressed for use as automotive fuel. Further, Rule 2(xxxii) defines 'manufacture of gas' as filling of cylinder with any compressed gas and also includes transfer of compressed gas from one cylinder to any other cylinder. The appellant-company is registered under the Central Excise Act as a 'manufacture of CNG.' In the certificate obtained from the Central Excis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clusion that the compression of natural gas into compressed natural gas does not result in bringing into existence in a new product and the activity of compressing the natural into compressed natural gas would not amount to manufacture or production. The Tribunal records in paragraph 5 as hereunder: We have considered the rival submissions, perused the material available on record and gone through the orders of the authorities below and the judgment cited by learned A.R. of the assessee. We find that it is noted by CIT (A) on page No.6 of his order that the assessee's activity of conversion of natural gas to compressed natural gas does not amount to bringing out a new and distinct object or article or thing having different charact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not saleable unless it is bottled and therefore, bottling of LPG into cylinders makes LPC saleable is not otherwise saleable. There is difference in the facts, In our considered opinion, the judgment of Hon'ble Bombay High Court is not applicable in the facts of the present case. Since compression of natural gas into CNG does not result into bringing into existence any new product, in our considered opinion, this activity is neither manufacture nor production and hence, no interference is called for in the order of CIT (A) on this issue. Accordingly, ground No.1 of the assessee is rejected. From a reading of the facts above and the Tribunal's order and other material on record, it comes to the fore that natural gas which come ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... distinct name, character and use and therefore, the test to determine whether 'manufacture' has taken place is satisfied. Without undergoing the process of compression natural gas in its original form cannot be used as fuel for the automobile industry. It is only upon undergoing the process of compression, it is converted into compressed natural gas which is a commodity, to be used as a fuel for the automobile industry. The Tribunal has failed to discuss this aspect of the matter completely and has ignored the material placed by the appellant on record whereby it has sought to show that the entire process by which natural gas is compressed and having been compressed acquires a new and changed name of compressed natural gas ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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