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TMI Blog2016 (12) TMI 814X X X X Extracts X X X X X X X X Extracts X X X X ..... er: "Whether the compressed natural gas produced by the appellant, having different name, character and use from natural gas can be said to be covered by the phrase manufacture or production?" The facts of the case are that the appellant procures gas from GAIL Indian Limited and compresses it through the compressor for the manufacture of compressed natural gas (CNG), which is subsequently sold to the customers, as fuel for vehicles. The natural gas purchased by the appellant from GAIL India Limited is either sold thorugh appellant-company's own pipelines to factories and household etc. which sale is made as piped natural gas (PNG) sale.The appellant also manufactures compressed natural gas (CNG) from the natural gas received by it f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral Excise Act as a 'manufacture of CNG.' In the certificate obtained from the Central Excise Authorities, it is clearly mentioned that the appellant is a manufacturer of excisable goods. Further, the appellant company is regularly paying Excise Duty on the manufacturing of compressed natural gas (CNG). The appellant does not manufacture anything besides CNG from PNG. The circular dated 16.10.2008 had also been issued under the Central Excise Act wherein it is clearly mentioned that compressed natural gas (CNG) is a fuel manufactured product, therefore, excise duty is leviable on the production of CNG. The trade tax authorities have also passed a order in the case of the appellant company, in which it has been held that conversi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ringing out a new and distinct object or article or thing having different character,use or chemical composition. In the light of these findings of CIT (A), now we examine the judgment of Hon'ble High Court rendered in the case of Commissioner of Income-tax Vs. Hindustan Petroleum Corporation Ltd. (Supra) cited by learned A.R. of the assessee. In this case, the issue before the Hon'ble High Court was that as to whether the activity of the assessee of bottling LPG gas amounts to production or manufacturing activity for the purpose of deduction under Section 80HHC and 80-IA of the Income Tax Act, 1961. Hon'ble Bombay High Court has given a finding that the process of bottling liquified petroleum gas into cylinders makes the gas ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and other material on record, it comes to the fore that natural gas which comes through pipelines in its natural form cannot be used for the same purposes as compressed natural gas that is to be used as automobile fuel. The appellant on the other hand contends that it is manufactured compressed natural gas which is used for the automobile fuel, which is prepared by a process of manufacture, by which the natural gas is put through a plant/machinery for compression and when the compressed gas comes out in its new form it is used for the automobile fuel. After undergoing the process of compression, natural gas acquires a new form by the name of compressed natural gas. It has a distinct use as automobile fuel and a distinct commercial name. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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