Taking note of the CESTAT decision in the case of Ammonia Supply Company which has attained finality, and department’s Circular dated 8-10-1997, the Supreme Court of India has in the case of Vadilal Gases Ltd. upheld Tribunal’s decision that activity of filling gases in cylinders from tanker would not amount to manufacture in terms of first limb of Note 10 of Chapter 28 of the Central Excise Tariff.
Further, in respect of second limb of said Note, i.e. deployment of any other treatment to render a product marketable, the Court was of the view that activity of mixing of inert gases (like argon, nitrogen, helium etc.) with other gases like oxygen, nitrogen, carbon dioxide and making available such combination to the consumers in smaller cylinders, would also not amount to manufacture.
Earlier decision of the Court in the case of Goyal Gases, to the effect that such mixture does not result in creation of a new marketable commodity, was relied by the Apex Court while dismissing department’s appeal.