TMI Blog2018 (11) TMI 1284X X X X Extracts X X X X X X X X Extracts X X X X ..... hemicals itself, to the facts of present case the processes undertaken amounts to manufacture? Held that:- From the order dated 8.8.1992 of adjudicating Assistant Commissioner, and that of Commissioner (Appeal) dated 26.09.1994, in case of E Merck, it is quite evident that both the authorities had found the facts of the case identical were identical with the case of S D Fine Chemical [1991 (6) TMI 124 - CEGAT, NEW DELHI] as decided by the tribunal. The said order was appealed by the revenue before the Apex Court. Further the said order of tribunal, was not an unanimous order, and there was a difference in opinion amongst the Member’s hearing the matter in first instance. While Member (T) was in favour of allowing the appeal, Member (Judicial) disagreed and was for dismissing the appeals. When the matter was referred to third Member, third member agreed with the view of Member (Technical) for dismissing the appeal. Since the issue in case of E Merck was never examined by the Tribunal, on merits and the matter was agitated only for the reason that decision in case of S D Fine Chemicals, relied upon by adjudicating authority and Commissioner (Appeal) have been appealed before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Finished Products Inputs Description CETH Description CETH 1 E/1901/2006 Maharastra Aldehydes Chemicals Ltd Vs Commissioner Central Excise Raigad Hexane Fraction for ChromotographyLic hrosolv 2710.13 Hexane fraction from Petroleum Products 2710.12 Petroleum Benzene 60 0 -80 0 CGR 2710.90 Hexane (Petroleum Benzene or Petroleum Eher) 2710.12 2 E/155/2008 Bharat Dye Chem Industries Vs CCE Belapur Various Grades of Hexane LR, AR, HPLC, SG 2710.13 Hexane 2710.12 Various Grades of Petroleum Ether (Benzine) 2710.13 Petroleum Ether 2901.13 3 E/894/2009 CCE Belapur Vs Sunbel Alloys Company of India Ltd Hexane for ChromotographyLic hrosolv 27101112 Hexane from petroleum products ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E/85576/2016 2.1 The issue involved in all the appeals under consideration is whether the processes undertaken by the appellants to refine and purify the various petroleum products (Petroleum Benzine and Hexane) to obtain specified grade of petroleum products shall amount to manufacture in terms of Section 2(f) of Central Excise Act, 1944 for levy of Central Excise Duty. 2.2 The issue was earlier decided by the tribunal in appeal at S No 3, in case of M/s Sunbel Alloys Company of India Ltd., holding that processes undertaken amount to manufacture. However tribunal has held that extended period of limitation cannot be invoked and also no penalty need to be imposed in the facts and circumstances of the case. The order of tribunal holding that the processes undertaken amounted to manufacture was challenged before the Hon ble Bombay High Court. 2.3 Hon ble Bombay High Court in case of Sunbel Alloys Co. of India Ltd.[Civil Writ Petition No. 279 of 2015 with Central Excise Appeal No. 179 of 2014 (Original Side) order dated January 20, 2015]while remanding the matter, for fresh consideration by the tribunal made observations as follow: 19. In the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd to the litigation. In Revenue matters none is benefited by delays. If the delays are caused by repeated remand of proceedings then that has to be avoided. If its earlier orders have been brought to the notice of the Tribunal, then, the least that is expected is that they are dealt with and considered seriously and a conclusion is reached about their applicability to the facts and circumstances of a given case. The Tribunal which is manned by experienced members drawn from the Revenue or Technical Services and Judiciary are expected to perform this task efficiently. They are selected and appointed on account of their merit and not just their experience. They may not have dealt with matters which required them delivering judgments and passing binding orders after hearing both sides and on questions of law, but, their learning knowledge and experience as Members of the Tribunal would improve their performance by passage of time. This minimal expectation is not fulfilled nowadays and cryptic orders lacking in reasoning and precision are passed day in and day out. We do not know where the fault lies. It is either in the process of selection and appointment or because there is no revi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtaken by the Merck themselves and in the case of Merck matter was adjudicated by the tribunal vide its Final Order No 995/98-C dated 12.10.1998. c. The activities undertaken by them are identical to those which were undertaken by Merck and in terms of the decision in case of Merck, the processes undertaken by them do not amount to manufacture as has been held by tribunal earlier. d. Adjudicating Commissioner has in para 20 of impugned order held as follows 20 Further, on the issue of whether the purification of Commercial Hexane and Petroleum Ether to Hexane HLVC and Petroleum Ether (Benzene) to Petroleum Benzenes GR amounts to manufacture or otherwise. It is seen from the analysis reports technical details as well as manufacturing process, that the critical factors such as density, boiling/ distillation rangeshow no substantial change as such. Further, to consider these products of petroleum industry like different products getting separated from crude would not be proper as those involve hydrocarbon products separating at different levels of distillation and the process is much complex as those involves products of volatile nature. In the process under present refere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ialized use of solvent based on the improvement in the quality of the material supplied by Merck as result of purification. Adding suffix does not mean that there is change in the name of basic chemical based on which goods are bought and sold. The fact that the processed article is known by different suffix will not determine the question as to whether manufacture has taken place. He relied on following authorities in support- i. Sundari Rubber Works Vs State of Tripura [1991 (81) STC 200 (Gau)] ii. State of Orissa Vs Titaghur Paper Mills [1985 Suppl SCC 280]i. iii. State of Maharastra vs C P Manganese Ore Co. [1977 (1) SCC 643] iv. Y MoideenKunhi and Others Vs CCE [1986 (23) ELT 293 (Kar)] v. Bush India Ltd. Vs UOI [1980 (6) ELT 258 (BOM)] i. There is no change in the character of the goods/ Hexane and Petroleum ether remain the same after purification activity. Since there is no change in character, no manufacturing activity has taken place a. CCE Vs Osnar Chemical Pvt Ltd. [2012 (276) ELT 162 (SC)] b. CoromandalProdorite Pvt Ltd vs GOI [1985 (20) ELT 257 (Mad) ] c. Tata Exports Ltd. Vs UOI 1985 (22) ELT 732 (MP)] j. Since there is no change in name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the behalf of revenue Shri V K Agarwal, Additional Commissioner Authorized Representative submitted that a. After the process being undertaken by the various parties on the inputs, totally new products emerges which are known in the market by different names and their uses are totally different from that of inputs and therefore it cannot be said that the raw material and final products are same. b. in their statements, the employees of the assessee have stated that the final products were known differently in the trade and had different uses. In other words, each of final product had distinctive name, character and use which was different from the raw material. The processes employed therein, therefore amount to manufacture. c. In his support he relied upon various decisions listed as follows: i. C K Gangadharan Vs CIT [2008 (71) ELT 497 (SC)] ii. Peico Electronics Electricals Ltd Vs CCE [1994 (71) ELT 1053 (T)] iii. Collector Vs Peico Electricals Ltd. [2000 (116) ELT A72 (SC)] iv. Arti Electrodes Pvt Ltd Vs CCE [2009 (246) ELT 570 (T)] v. Laminated Packaging (P) Vs CCE [1990 (49) ELT 326 (SC)] vi. CCE vs Alok Enterprises [2010 (209) ELT 333 (Bom)] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. In the present case, the department has not made out a case to hold that the facts of the case law relied upon by the respondent as well as by the Assistant Collector are different from the facts of the present case. There is nothing to indicate in the application that the chemicals after purification by re-crystallization and distillation are converted into a new product with distinct and character. It is not even disputed that there is no chemical reaction involved in the process which would change the chemicals formula of the product. In this view of the matter, I reject the application. Tribunal Final Order No 995/98-C date 12.10.1998 3 We find that the basis of challenge to the impugned order in this case is that the department has preferred an appeal to the Hon ble Supreme Court against the judgement of the Tribunal in the S D Fine Chemicals case. We find that consequent upon the report of the tribunal filed before the Supreme Court in the S D Fine Chemicals reported in 1997 Supreme Court vide order dated 20.11.95 has dismissed the Revenue s appeal. Since the appeal of the revenue against S D Fine Chemicals has been rejected, there is no merit in the De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme Court while examining the issue in great details found that the order by third member was very cryptic and was not answering the issue raised by the Member (Judicial) while differing from the Member (Technical), accordingly the matter was again referred back to third member for passing a fresh order. The relevant extract from the order of Apex Court is reproduced below: Now coming to the facts of the case before us, it is clear from the perusal of the opinion of the third Member of the Tribunal that he has not dealt with the case in a full and proper manner and has disposed of the issue in a cryptic manner. It has, therefore, become necessary to remit the matter for the fresh opinion of the third Member of the Tribunal. The third Member shall not hear the parties and render his opinion afresh on the question referred to him. He shall do so within six months from this date. He shall transmit his opinion to this Court soon after rendering it. If the third Member, JyotiBalasundaram, who heard the matter is not available, the Chairman of the Tribunal shall specify another Member for hearing this matter. 3.5 Thus the order of tribunal on which reliance has been plac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidered and applied by us after amendment because Chapter Subheading 3003.31 does not contain definition of Ayurvedic Medicine and the product DML in nature, character and uses remains the same as it was prior to amendment. 3.6 In Bharat Sanchar Nigam Ltd. v. Union of India - [2006 (3) SCC 1] Hon ble Apex court held as follows: The decisions cited have uniformly held that res judicata does not apply in matters pertaining to tax for different assessment years because res judicata applies to debar courts from entertaining issues on the same cause of action whereas the cause of action for each assessment year is distinct. The courts will generally adopt an earlier pronouncement of the law or a conclusion of fact unless there is a new ground urged or a material change in the factual position. The reason why the courts have held parties to the opinion expressed in a decision in one assessment year to the same opinion in a subsequent year is not because of any principle of res judicata but because of the theory of precedent or the precedential value of the earlier pronouncement. Where facts and law in a subsequent assessment year are the same, no authority whether quasi-judic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Apex Court decision in case of S D Fine Chemicals, the earlier decision of Tribunal referred above cannot be a binding precedent, in view of decision in case of Jagjit Singh Vs Chandigarh Administration [J.T. 1995 (1) S.C. 445] and Allahabad High Court in case of Super Casettes [1997 (94) ELT 302 (SC)] 3.8 Hon ble Supreme Court has in case S D Fine Chemicals [1995 (3) SCR 84] held- The decisions aforesaid make it clear that the definition of the expression 'manufacture' under Section 2(f) of the Act is not confined to the natural meaning of the expression 'manufacture' but is an expansive definition. Certain processes, which may not have otherwise amounted to manufacture, are also brought within the purview of and placed within the ambit of the said definition by the Parliament. Not only processes which are incidental and ancillary to the completion of manufactured product but also those processes as are specified in relation to any goods in the section or chapter notes of the schedule to the Central Excise Tariff Act, 1985 are also brought within the ambit of the definition. As has been repeatedly observed by the Court, though the principles enunciated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E v. Krishna Carbon Paper Co. We are therefore, of the opinion that by process of lamination of kraft paper with polyethylene different goods come into being. Laminated kraft paper is distinct, separate and different goods known in the market as such from the kraft paper. Counsel for the appellant sought to contend that the kraft paper was duty paid goods and there was no change in the essential characteristic or the user of the paper always lamination. The fact that the duty has been paid on the kraft paper is irrelevant for consideration of the issue before us. If duty has been paid, then benefit or credit for the duty paid would be available to the appellants under Rule 56A of the Central Excise Rules, 1944; It is no doubt correct that in the above case it was also observed that manufacture is bringing into being goods as known in the excise law i.e. to say known in the market having distinct separate and identifiable function. On this score in our opinion, there is sufficient evidence. On the basis of the above observations, it was strenuously contended by Mr. Lalit that in the above case there was sufficient evidence on record to hold that after manufacture the goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is subjected to the process of manufacture can no longer be regarded as the original commodity, but is recognised in the trade as a new and distinct commodity. The test laid down by Pathak, J. in Pio Food Packers' case [1980 (46) STC 63 (S.C.)] should be the guiding principle in determining the question whether a particular commodity has been subjected to the process of manufacture. Commonly manufacture is the end result of one or more processes through which the original commodity is made to pass. The nature and extent of processing may vary from one case to another and indeed there may be several stages of processing and perhaps different kind of processing at each stage. With each process suffered the original commodity experiences a change. But it is only when the change, or a series of changes, take the commodity to the point where commercially it can no longer be regarded as the original commodity but instead is recognised as a new and distinct article that a manufacture can be said to take place. The test that is required to be applied is: does the processing of the original commodity being into existence a commercially different and distinct commodity? On an application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacture as laid down by the Hon'ble Supreme Court in the cases cited (supra) is not satisfied as purification of a chemical to obtain another grade of the same chemical, particularly when the purification is marginal, cannot be said to result in a totally new chemical commodity. 18. The question may be examined from the context of the new Central Excise Tariff Act, 1985. Therein sub-heading 2915.10 covers Acetic Acid. Evidently, the material being purchased by the appellants from the market would have suffered duty as Acetic Acid under sub-heading 2915.10. Even after purification, there is no dispute that the product is being sold by the appellants in the market only as Acetic Acid. If the Revenue were to levy excise duty on the purified Acetic Acid, it would only be under subheading 2915.10 only. That would clearly amount to double taxation. This anomaly does not get highlighted in the present matter because the Department is levying duty under Tariff Item 68 of the Schedule to the erstwhile Central Excise Tariff. It is an accepted and agreed position in the present case that the purification of chemicals is not included as a process of manufacture under Section 2(f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 8 of the said Act. The respondent preferred an appeal against this decision to the Sales Tax Tribunal. The Tribunal held that mixing of distilled water with methonol by the respondent as aforestated did not amount to manufacture within the meaning of the said term under section 2(17) of the said Act. In view of this conclusion, the Tribunal did not examine the question of the rate of tax payable on the sale of Methimix. The Tribunal set aside the order of the Commissioner of Sales Tax in the determination proceedings, holding that the respondent having purchased methonol from a registered dealer would be entitled to the benefit of resale while selling the diluted methonol in the way in which it had done. As no process of manufacture was involved, the sales by the respondent would amount to resales within the meaning of section 2(26) of the said Act and hence the amount of the said resales would be liable to be deducted from the taxable turnover under section 8 of the said Act. The question referred to us arises from this decision of the Tribunal. 3. Clause (17) of section 2 of the said Act gives a very extended definition to the term manufacture . The said clause reads ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der a definite name, viz., Methimix. In these circumstances, it appears to us that it is beyond dispute that a new commercial commodity, viz., Methimix, has been brought into existence by the activity of mixing methonol with distilled water carried out by the respondent and the said activity of mixing methonol with distilled water carried out by the respondent does amount to manufacture within the meaning of clause (17) of section 2 of the said Act. Mr. Sheth has drawn our attention to our decision in Commissioner of Sales Tax v. Bombay Mercantile Corporation ([1975] 35 S.T.C. 505). In that case, the respondent, a dealer in lubricating oils, purchased some drums of oil and after hand-blending the same sold the resultant mixture. It was held that this process carried out by the respondent in that case did not amount to manufacture within the meaning of section 2(17) of the said Act. In out view, this decision has no application to the case before us, because, as we have pointed out in that case, there was nothing on the record to show that any new or different commercial commodity came into existence as a result of the process of handblending applied to the oil purchased by the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Oil Mills (P) Ltd. (1989) 3 SCC 343, the apex Court held that all processes do not constitute manufacture. Manufacture is complete as soon as by the application of one or more process, the raw material undergoes some change. The moment there is transformation into a new commodity commercially known as a separate and distinct commodity having its own character and use, manufacture takes place as held by the apex Court in Aditya Mills Ltd. vs. Union of India (1988) 4 SCC 315.Hon ble Apex Court in the case of UOI vs. Delhi Cloth and General Mills Co. Limited 1977 (1) ELT J- 199 (SC) held that manufacture implies a change, but every change is not manufacture and yet every change of an article is the result of treatment, labour and manipulation. But something more is necessary and there must be transformation; a new and different article must emerge having a distinctive name, character or use. Thus in light of the legal position as enumerated above, the facts in the present cases need to be examined. 4.2 From the adjudication order in the case of Reshma Organics, following paras, narrate the facts and understanding the of raw material and finished products by the appellants empl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rade Hexane and the variance in prices is due to the above mentioned process. 5. Statement of Shri Sandeep Mathur, Quality Assurance Manager of M/s. RFCL, was recorded under Section 14 of the Central Excise Act, 1944 on 07.03.2007, wherein he stated, inter alia, that: the raw material Hexane was first washed with sulphuric acid 3 to 4 times and then again washed with water, till the same is neutral to pH; the said material is then rectified in rectification column and the fraction between 60-65o was collected as Hexane s of HPCL were then charged in glass reactor, washed with water and finally distilled with the help of steam; the low boiling points impurities were removed and final products were separated at particular boiling point; the final products were distinct from the input products which contained low volatile matter, metallic impurities, water, sulphur compounds, Thiophene as compared to raw materials and then it was cleared in the name of specific grades such as AR [Analytical Reagent], LR [Laboratory Reagent] and SG [Special Grade]; more or less similar process was carried out to get the petroleum Ether 60-80 [Fraction from Hexane] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in the case of S.D. Fine Chemical is clearly distinguishable. [In fact, even for chemicals falling under chapter 28 and 29 of the Central Excise Tariff, the S.D. Fine Chemicals case is no longer applicable as chapter Notes were inserted in these two chapters w.e.f. 1.3.1997, making the process of repacking, labeling, re-labeling, etc. as amounting to the manufacture]. As regards the case of E. Merck, there also the items involved were chemicals and going by the text of the relevant CESTAT order, the processes involved were again physical process, namely, distillation, crystallization and filtration. In fact, in the case of Alok Enterprises vs. CCE, Mumbai-III [2004 (ELT 550) (Tri- Mum)], a decision delivered after the case of S.D. Fine Chemicals, it has been held that purification of Acid would amount to manufacture. 20. Even for arguments sake if it taken that the process of purification may not amount to manufacture in respect of chemicals going by the decision in the case of S.D. Fine Chemicals and E. Merck, this logic cannot be extended to petroleum products. The Petroleum products like gasoline, Kerosene etc. are produced through the process of purification of crude ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the final products were known differently in the trade and had also different uses. In other words, each final product had a distinctive name, character and use which were different from the raw material. The processes employed therein, therefore amount to manufacture. 22. It is contended by M/s. ROCPL that while the commercial grade can be used for generic purpose, the special grades are used in specialized applications like LR Grade is used for degreasing/clearing of oily surfaces in industries such as pharma, injection manufacturing etc. AR/SG Grade is used for Clinical Research Organization and HPCL Grade is used as mobile phase in HPCL and this cannot, however, mean that specialized grades cannot be put to the use to which commercial grades are put. I find that it s a matter of common prudence that if industry can manage to use the commercial grade to serve their purpose and thereby spending less would not opt for specialized grade incurring more expenditure. It is only when a person or industry need a chemical or product for specific purpose that the person or industry will go for its use. I find that the value of commercial grade is enhanced by turning them into speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reme Court are applied in the case, it will pass the same on all three accounts. 9. Reliance has been placed by the appellants on the case law of M/s. SD Fine. The fact of the case as mentioned in the citation is as under: 4.The appellants were issued with a show cause notice dated 30-3-1983 alleging that the process of purification amounts to process of manufacture. The appellants filed their reply dated 2-9-1983. Relevant portion of the reply is extracted below : 4.1 The facts in brief of the cases are that we are manufacturers of laboratory and fine chemicals like Ammonium oxalate. Ammonium acetate etc. the details of which are given in Annexure `A to our Classification list submitted with effect from 1-4-1983. We also purify certain products purchased by us from the open market by various methods namely, simple distillation, filteration, crystallization. etc. Some of the products purchased by us from open market are subjected to processes like grinding, sieving etc. We enclose herewith the actual processes carried out for purification, grinding etc. as Annexure I. As will be seen from the said Annexure, we are not manufacturing any new product and the process ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e components of similar boiling range. 4.8 As per Encyclopaedia, Britannica- The primary destination of crude oil is a refinery. There any combination of three basic functions is carried out: (1) separating the many types of hydrocarbon present in crude oils into fractions of more closely related properties, (2) chemically converting the separated hydrocarbons into more desirable reaction products, and (3) purifying the products of unwanted elements and compounds. The main process for separating the hydrocarbon components of crude oil is fractional distillation. Crude oil fractions separated by distillation are passed on for subsequent processing into numerous products, ranging from gasoline and diesel fuel to heating oil to asphalt. Most methods of distillation used by industry and in laboratory research are variations of simple distillation. This basic operation requires the use of a still or retort in which a liquid is heated, a condenser to cool the vapour, and a receiver to collect the distillate. In heating a mixture of substances, the most volatile or the lowest boiling distills first, and the others subsequently or not at all. This simple apparatus is ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mples of such materials include fatty acids and soybean oils. The usual procedure is to pass steam into the liquid in the still to supply heat and cause evaporation of the liquid. 4.9 From the above referred technical literature it is quite evident as result of the processes undertaken the raw material is (1) refining the hydrocarbons present in commercial grade bulk hexane/ petroleum ether (benzene) into fractions of more closely related properties, (2) converting raw material into more desirable reaction products, and (3) purifying the products of unwanted elements and compounds. Such a process may have altered some or all characteristics of the product. However the test for manufacture as laid down by the series of decisions referred above is not vis a vis the alteration in some or all the characteristics of raw material, but is the emergence of a new product having distinct name, character and use. The argument of the party s that two critical parameters viz density and boiling range have not undergone much change, is not in accordance with the test of manufacture, laid down by the various authorities discussed above. 4.10 In case of Suprajith Chemicals Pvt Ltd [2003 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the process or technology. In Laminated Packing [1990 (49) E.L.T. 326], the Supreme Court held that even if the resultant article falls under the same tariff heading as the item that went into the process to produce it, the process would still amount to manufacture if, it resulted in a commercially different article. Therefore, in this view of the matter, it is not permissible now to determine whether a particular process of technology undertaken, amounts to manufacture or not, what is essential to determine the activity to constitute manufacture , under Central Excise to attract duty under the Central Excise Act, 1944 would be to determine what new commercially different article has emerged consequent to an activity undertaken. In the present case, the mere statement by the appellants will not rebut the findings arrived at by the Commissioner in the impugned order based on the decision of SD Fine Chemicals [1995 (77) E.L.T. 49 (S.C.)] and the following findings of the Commissioner in the impugned order, 19. The assessee has not furnished any arguments on this except stating that the chapter note does not state that purification amounts to manufacture. No doubt t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rlier, the departments contention that purification amounted to manufacture is not in the general sense of the term but it is consequent to Chapter Note 11 of Chapter 29, which specifically states that adoption of any other treatment to render the product marketable shall amount to manufacture. Purification of the acetone and ethyl acetate render them marketable and hence the process amounts to manufacture. Accordingly, CED is attracted on such purification. I have perused the decisions relied upon which state that purification or liquidation do not amount to manufacture. I find that none of these decisions either relate to goods of Chapter 29 or to goods falling in other chapters, which included the note providing that treatment to render the product marketable shall amount to manufacture. Thus, this argument of the assessee is not tenable. 4.11 Hon ble Supreme Court has in case of Air Liquide North India Pvt Ltd. [2011 (271) ELT 321 (SC)] category held as follows in similar circumstances: 10.It is not in dispute that the appellant had purchased Helium gas from the open market and that its quality control officer had conducted various tests and issued analysis report/q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . If the product/commodity, after some process is undertaken or treatment is given, assumes a distinct marketability, different than its original marketability, then it can be said that such process undertaken or treatment given to confer such distinct marketability would amount to manufacture in terms of Chapter note 10 to Chapter 28 of the Act. 14.The only conclusion from the above is that the tests and process conducted by the appellant would amount to treatment in terms of Chapter Note 10 of Chapter 28 of the Act. The fact that the gas was not sold as such is further established from the fact that the gas, after the tests and treatment, was sold at a profit of 40% to 60%. If it was really being sold as such, then the customers of the appellants could have purchased the same from the appellant s suppliers. When this question was put to the officer of the appellant, he could not offer any cogent answer but merely stated that it was the customers preference. Further, he did not give proper answer as to how the profit margin was so high. The appellant had supplied the gas not as such and under the grade and style of the original manufacturer but under its own grade and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pay excise duty for the reason that it has manufactured Helium within the meaning of the term manufacture as explained in terms of Chapter Note 10 of Chapter 28 of the Act. 21.So far as the issue with regard to relabelling is concerned, we are in agreement with the view expressed by the Tribunal that relabelling would not mean mere fixing of another label. When the appellant was selling different cylinders with different marking or different certificates to its different customers, we can say that the appellant was virtually giving different marks or different labels to different cylinders having different quality and quantity of gas. 22. It can be very well said that the Helium purchased by the appellant was in a marketable state but it is equally true that by giving different treatment and purifying the gas, the appellant was manufacturing a commercially different type of gas or a new type of commodity which would suit a particular purpose. Thus, the treatment given by the appellant to the gas sold by it would make a different commercial product and, therefore, it can surely be said that the appellant was engaged in a manufacturing activity. 4.12 In view of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the duty paid on the inputs and input services used in the manufacture of the finished products on which the duty demand is confirmed. This also would have to be worked out on the basis of documentary evidence to be submitted by the respondent. 7. In view of the above, we remand the matter back to the adjudicating authority for re-computation of the duty demand with the normal period as mentioned above and also for allowing Cenvat credit of the duty paid on the raw materials, subject to submission of documentary evidences. Thereafter, the revised demand will have to be computed. Needless to say that the appellant would be liable to pay interest on re-computed duty demand. In the facts of the case, imposition of penalty is not warranted. Thus, the appeal is allowed by way of remand in the above terms. 5.2 The said part of the order has not been the subject matter of dispute before the High Court, and has acquired finality. Even otherwise we do not find any justification for invoking extended period of limitation in these cases, or denial of CENVAT credit if same is otherwise admissible to the party s. Accordingly we remand the matter back to the adjudicating authority fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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