Per G.R. Sharma :

The short point for determination in this appeal is whether the appellants by affixing its own label on its own cylinders containing Helium Gas manufactured and filled by M/s. Pure Helium India Pvt. Ltd. into empty gas cylinders of BOC would amount to manufacture and attract levy of duty of excise in terms of Note 10 of Chapter 28 of Central Excise Tariff.

2. The facts of the case briefly stated are that the appellant is a manufacturer of Acetylene, Oxygen etc. amongst other gases and clears the same on payment of appropriate duty of excise. Helium is procured by the appellants from other manufacturers and sold under BOC brand name claimed as a part of its trading activity. The Revenue issued a show-cause notice alleging that since they had affixed label of there own name and other particulars, therefore, in terms of Note 10 of Chapter 28, the legal fiction of manufacture is created. Their activity of affixing labels amounted to manufacture and called upon the appellants to explain as to why Central Excuse duty amounting to Rs. 7,39,910/- should not be demanded from them and why a penalty should not be imposed. The Joint Commissioner adjudicating the case confirmed the demand and imposed a penalty to Rs. 1,00,000/- on the firm and further a penalty of Rs. 1,00,000/- on Shri P.R. Chakraborty, Business Manager of the firm. When the appellants filed an appeal, the ld. Commissioner (Appeals) confirmed the order of the adjudicating authority and hence the present appeal before us.

3. Arguing the case for the appellants, Shri B.J. Mookherjee, ld. Advocate submits that the only activity undertaken by the appellants was of sending empty cylinders for filling helium gas and that when the helium filled cylinders were received back by the appellants, they affixed their own name indicating other particulars after testing the purity etc. of the gas. He submits that this activity of the appellants was not covered by Note 10 of Chapter 28 of the Central Excise Tariff. In support of his contention, he cited the decision of the Tribunal in the case of Ramkishore Chemicals Co. Pvt. Ltd. Vs. CCEx., New Delhi reported in 2001 (47) RLT 679 (CEGAT-Del.) and further decision of this Tribunal in the case of Ammonia Supply Company Vs. CCEx., New Delhi [reported in 2001 (45) RLT 271]. Ld. Counsel submits that the ratio of the decision of the Tribunal in these two cases squarely covered their case. He, therefore, prayed that the appeal may be allowed.

4. The T.K. Kar, ld. DR submits that the labelling and re-labelling of the containers created the legal fiction of manufacture in terms of Note 10 of Chapter 28 of the Central Excise Tariff. He submits that the fact remains that the appellants affixed labels on their cylinders after getting them filled with Helium and other special gases. He reiterates the findings of the authorities below.

5. We have heard the rival submissions. We find that the entire issue revolved round the interpretation of Note 10 of Chapter 28 of Central Excise Tariff. Note 10 to Chapter 28 reads:-

"In relation to products of this Chapter, labelling or re-labelling 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 manufacturer."

We find that this Tribunal in the case of Ammonia Supply Co. cited above has interpreted this Note lucidly in Para 5 6 which are reproduced below :

"5. From the above Chapter Note one can spell out the manufacture process only if the activities mentioned therein are carried out. The activity mentioned therein when carried out area treated as manufacturing process. In such circumstances, a legal fiction as to manufacture is to be presumed. The fiction incorporate in the note should have a restricted meaning only. In other words, for a manufacturing process to come into existence, by invoking this fiction, ingredients contained therein must be strictly complied with. What are the