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TMI Blog2021 (8) TMI 240X X X X Extracts X X X X X X X X Extracts X X X X ..... n of any other treatment to render the product marketable to the consumer, shall amount to "manufacture"." 3. The only amendment that was made on 01.03.2008 to Chapter Note 9 is that 'and' was replaced 'or'. 4. Excise Appeal Nos. 41252, 41253, 41254, 41255, 41256, 41257 and 41258 of 2013 seek the quashing of a common order dated 30.01.2013 passed by the Commissioner, adjudicating the seven show cause notices covering the period from April 2005 to March 2012, by which the demand has been confirmed with interest and penalty. 5. Excise Appeal Nos. 41259, 41260, 41261, 41262, 41263 and 41264 of 2013 have been filed to assail the order dated 31.01.2013 passed by the Commissioner, adjudicating the seven show cause notices covering the period 2005-06 to 2011-12, by which the demand has been confirmed with interest and penalty. However, for the show cause notice No. 12/2010 dated 30.06.2010, even after confirming the demand, the Commissioner ordered that the demand shall stand dispensed because of the overlapping period confirmed by Order No. 5/2013, which order has been assailed in one of the Excise Appeals mentioned in the second paragraph of this order. Thus, only six appeals have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase to contend that the activity undertaken by the appellant would not amount to manufacture under Chapter Note 9 to Chapter 28 of the Tariff Act. 11. As noticed, above four orders dated 30.01.2013, 31.01.2013, 28.04.2014 and 26.03.2015 passed by the Commissioner have been assailed in the appeals. The first order and the second order adjudicated seven show cause notices each, while the third order and the fourth order adjudicated one show cause notice each. 12. It would be useful to examine the four orders. Order dated 30.01.2013 13. The Commissioner noted that the issue actually first arose for the period from 2002-03 upto March 2004, during which period two orders, each dated 29.09.2004, were passed by the Deputy Commissioner holding that the process undertaken by the appellant amounted to manufacture and the practice of clearing carbon dioxide in cylinders of the buyers with their identification marks would render the product as branded goods, disentitling the appellant from claming the exemption. The appellant, however, filed appeals which were allowed by the Commissioner (Appeals) by order dated 11.04.2005 holding that the activity did not amount to manufacture. The Dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in the Central Excise Tariff Act, 1985 to the present period of dispute, it can be concluded that the subject activity of M/s. PCPL of receiving the carbondioxide gas in pipeline and refilling it into cylinders would clearly amount to manufacture as per the Excise law discussed in detail above since the above described treatments render the goods certainly marketable to their customers according to their required standards/ specifications. 4.4 The fact that the gas was not sold as such is further established from the fact that the gas after the said process / treatment has acquired further value addition thereby resulting in a higher market price compared to the price at which it was procured. This is clear evidence to show that the treatment given to the CO2 gas cleared in cylinders has conferred on the final product a distinctly different marketability among its buyers/dealers in this case. Thus it satisfies the requirement of the third ingredient of Note 9 of Chapter 28 of the Central Excise Tariff Act, 1985 i.e., adoption of any other treatment to render the product marketable to the consumer shall amount to manufacture. (Case of Air Liquide North India Pvt. Ltd. 2011 (271) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Note 9 of Chapter 28 of the Tariff Act. 19. It would be useful to reproduce the relevant portions of the order dated 21.07.2016 passed by the Principal Commissioner and they are:- 1 M/s. Popular Carbonic Pvt. Ltd., 198 / 6A, Bharathiar Street, Manali, Chennai - 600 068 (hereinafter referred to as Ms. PCPL) are manufacturers of Liquefied and Solidified Carbon-di-oxide (CO2) falling under Chapter 28 of the First Schedule to the Central Excise Tariff Act, 1985. They are registered with the Central Excise Department with Registration No.AACCP9974FXM001 since October, 2004. M/s. PCPL receive Carbon-di-oxide gas (CO2) from M/s. Madras Fertilizers Ltd, Chennai through pipeline and by compression process the CO2 gas is filled in cylinders and supplied to their customers. 2 In view of Chapter Note 9 of Chapter 28 of the Central Excise Tariff Act, 1985 which reads "in relation to the products of this Chapter labelling or relabeling of containers or 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" the department took a view that the activity of filling the gas received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e I find that the ratio of the judgement of the Hon'ble Supreme Court in their favour is applicable even after the amendment to the chapter note. 4.12 I find that my learned predecessors have placed reliance on the case of Air Liquide North India Pvt. Ltd. on a finding that it was a later case in which the Hon'ble Supreme Court as put forth a new interpretation to the chapter note which should be preferred to the one adopted in the earlier case of M/s BOC (I) Ltd reported in 2008 (226) ELT 323 which was relied on by the CESTAT. However, I find that the facts averred to by the Hon'ble Supreme Court in the case of BOC (I) Ltd is mere packing while in the case of Air Liquide North India Pct. Ltd., as extracted above, the facts indicate a process that goes far beyond 'mere packing'. In fact I find that the case of BOC (I) Ltd has been referred to in the judgement relating to Air Liquide North India Pvt. Ltd. and the same has not been doubted or departed but the differing judgment emanates from the different factual scenario. In the case of M/s PCPL, admittedly the Commissioner (Appeals) finding that the process can at best be called packing has reached finality. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce dated 15.07.2015 was issued to the appellant for the period March 2014 to April 2015 also alleging that the activity of filling gas received through pipeline into cylinders by compression amounted to manufacture. The Principal Commissioner by order dated 21.07.2016 dropped the proceedings holding that the process did not amount to manufacture. This order of the Principal Commissioner had attained finality as not appeal was filed by the Department. In such circumstances, it is not open to the Department to take a different stand in this appeal. 21. Shri L. Nandakumar, learned Authorised Representative appearing for the Department however supported the impugned orders and submitted that they do not call for any interference in this appeal:- (i) Learned Authorised Representative placed emphasis on the third requirement contained in Chapter Note 9 of Chapter 28 which is "adoption of any treatment to rendered the product marketable" to contend that the activity undertaken by the appellant would amount to manufacture. In this connection learned Authorised Representative placed reliance upon the following decisions of the Supreme Court:- a) Air Liquide North India Pvt. Ltd. vs. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ote that for the subsequent period, the word 'and' in the relevant chapter note has been replaced by the word 'or'. But at the material time April, 2002 to March, 2004, the Chapter Note contained the word 'and' and hence, the cited Tribunal's decision as well as the cited decision of the Hon'ble Supreme Court squarely apply to the present case. Hence, we hold that the impugned order passed by the lower appellate authority requires no interference. Consequently, the department's appeal is dismissed." 25. This order of the Tribunal was upheld by the Supreme Court and the judgment is reproduced below: "Delay condoned" "We have heard learned senior counsel appearing for the appellant." "In our opinion, no question of law arises from the impugned judgment, warranting our consideration. This appeal is dismissed accordingly." 26. It would now be necessary to examine the main contention raised by the learned counsel for the Appellant that since the order dated 21.07.2016 passed by the Principal Commissioner for the subsequent period attained finality, as no appeal was filed by the Department to assail the said order, the Department cannot now agitate that the activity undertaken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8223; product or process in any way differed from the product and process of M/s. Chandulal K. Patel and Company. However, the Excise Authority decided against the Appellants without heeding such request. On 4-8- 88 a decision was taken by the Assistant Collector to classify the Appellants‟ product under Tariff Heading 24.04. On 11-8-88 a sample of the Appellants‟ product was taken by the respondents but returned within one week without testing on the ground that the issue was being finalised by the Assistant Collector. In the appeal preferred to the collector, the Appellants again raised the issue specifically that the process followed by and the product of the Appellants were identical with that of M/s. Chandulal K.P. Patel and Company and that the Appellants product should be similarly classified under Heading 24.01. While upholding the decision of the Assistant Collector, the Collector did not consider this aspect of the matter at all. The point was again taken specifically in the Appellants‟ Appeal before the Customs, Excise and Gold (Control) Appellate Tribunal. The Tribunal however dismissed the appeal and said: The Appellants have stated that some of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d before it by the respective parties. 18. In this view of the matter, when the Commissioner in regard to the appellant own case for a subsequent period held that Service Tax cannot be levied under the category of BAS, which order of the Commissioner attained finality, the Department cannot be permitted to contend in this appeal that Service Tax under the category of BAS can be levied upon the Appellant." 29. This issue was also examined by the Supreme Court in Commissioner of C. Ex., Hyderabad vs. Novapan Industries Tries Ltd. [2007 (209) E.L.T. 161 (S.C.)] and the relevant portion of the judgment is reproduced below: "11. In our view, the point in issue is squarely covered by the judgment of this Court in MRF case [(1986) Suppl. SCC 751] read with the subsequent order passed in the Review Petition reported in (1995) 4 SCC 349. 12. The Tribunal in its order has relied upon its earlier judgment in ICI India Ltd. v. CCE, Hyderabad [2000 (91) ECR 152 (T)] in which the similar issue was involved and the Tribunal had taken the view that interest being inbuilt in the price which had not been charged separately, was deductible from the assessable value. Xxxxxxx 13. Counsel fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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