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TMI Blog2017 (9) TMI 413X X X X Extracts X X X X X X X X Extracts X X X X ..... l Gas from Coal Bed Methane Wells and brings the same to their factory through underground pipelines. At the factory, they undertake compression of Natural Gas and filled into cascades/cylinders. The compressed Natural Gas (CNG) is cleared in cylinders to M/s Indian Oil Company Ltd. on payment of Central Excise Duty. The dispute, however, is with reference to clearances made in cascades during the period October, 2008 to April, 2010. Such clearances were made to the premises of their customers where they had installed Pressure Reducing Skids (PRS) wherein the CNG was subjected to decompression to make Natural Gas which was delivered to their customers. No Central Excise Duty was paid by the assessee-Respondents on such clearances. The Depar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w : "5. In relation to natural gas falling under heading 2711, the process of compression of natural gas (even if does not involve liquefaction), for the purpose of marketing it as Compressed Natural Gas (CNG), for use as a fuel or for any other purpose, shall amount to manufacture ." 7. In the impugned order, the Commissioner (Appeals) has discussed the issue at length as follows : "9. A careful reading of this Chapter Note would reveal that it is not merely the process of compression of natural gas which amounts to manufacture; such compression of natural gas should be for the purpose of marketing it as CNG. In other words, only when the appellant sells the gas as CNG to the industrial consumers will the process of compression amount t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its carriage to the premises of the industrial consumers in cascades is only for ease of transportation. 11. I, am, therefore, of the view that the appellant has not manufactured CNG within the meaning of Section 2(f) of the Central Excise Act, 1944 read with Note 5 to Chapter 27 of the Central Excise Tariff. In that case, there is no question of payment of any duty by the appellant." 8. We note that even though the Natural Gas is transported to the customers premises in compressed form, such process of compression has been done for the purposes of transportation only. Such process cannot be considered as a process of manufacture, since the goods are sold not as CNG but as Natural Gas. 9. In view of the above discussions, we find no re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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