The main legal point established in the judgment is the interpretation of the deeming provision in Note 10 of Chapter 28 of the Central Excise Tariff Act, 1985, and its application to the activities of labelling, repacking, and mixing of gases. The judgment emphasizes the importance of analyzing relevant case law and circulars to determine the applicability of the deeming provision.

ORDER :

The adjudication of a show cause notice under Section 11A of the Central Excises and Salt Act, 1944 by the Commissioner, which was adverse to the assessee, was interdicted by the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench (hereinafter referred to as "the Tribunal") by the impugned order on a finding that the process deployed in the unit of the assessee did not amount to manufacture within the meaning of Note 10 of Chapter 28 of the Central Excise Tariff Act, 1985 (hereinafter referred to as "the Tariff Act"). The learned Tribunal having interdicted the attempt on the part of the adjudicating authority to hold that the assessee was liable to pay the differential duty on the finding recorded on the core issue, namely, that the activity undertaken by the assessee did not amount to manufacture, the other questions arising, namely, the availability of the extended period of limitation under the proviso to Section 11A of the Act and also whether the sales/transfers were to related person and not made at arms length were not gone into by the learned Tribunal.

2. The above truncated scope of the matter is what would require consideration of this Court in the present proceedings.

3. We have heard the learned counsels for the parties.

4. Note 10 of Chapter 28 of the Tariff Act is in the following terms :

"In relation to products of this Chapter, labelling or relabelling of containers and 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'."

5. Reading the aforesaid Note 10 of Chapter 28 of the Tariff Act would go to show that the deeming provision contained therein with regard to what would also amount to manufacture is in two parts. The first is where labelling or relabelling of containers and repacking from bulk packs to retail packs is undertaken and secondly where the adoption of any other treatment is undertaken to render the product marketable to the consumer. Whether either of the two situations are attracted to the present case, is the moot question that would require an answer from the Court.

6. The learned Commissioner in the adjudication order dated 08.12.2006 has elaborately dealt with the process deployed in the unit of the assessee after receipt of liquified Nitrogen and Argon in bulk in cryogenic tankers. The details in this regard may be usefully extracted below :

"The cryogenic tankers are owned by M/s. VCL, a sister company of M/s. VGL. The liquefied Nitrogen and Argon are re-gassified, and packed in cylinders of 6 cubic metres or 7 cubic metres capacity for retail sale. The cylinders are owned by M/s. VCL. Before filling the gases, the cylinders are cleaned for removal of impurities like moisture, oxygen, carbon dioxide, etc., so that the gases filled in the cylinders are as much free of the impurities of oxygen, moisture, carbon dioxide etc., as possible. The gases according to the level of purity are graded as VCL I Nitrogen, VCL I Argon, VCL II Nitrogen, VCL II Argon, UHP Argon, etc., - the UHP grade being the purest. Besides pure Argon and Nitrogen, M/s. VCL also make mixtures of gases i.e., Argon with Carbon Dioxide, Argon with Oxygen, Argon with Nitrogen, Nitrogen with Carbon Dioxide, Nitrogen with Oxygen, etc., in which gases are mixed in a fixed proportion and the same are also packed in retail cylinders of 6 or 7 cubic metres capacity. After packing of the Nitrogen, Argon, and gas mixtures in retail cylinders, the same are affixed with a label mentioning the name of the product, purity grade, the level of impurities, batch no. and cylinder no. The labels also bear the name of the marketing company - M/s. Vadilal Chemicals Ltd. (M/s. VCL), a sister company, as well as the monogram of Vadilal group. The labels being affixed on the cylinders."

7. Insofar as the first limb of Note 10 of Chapter 28 of the Tariff Act is concerned, even if we proceed on the basis that labelling or rel