Assistant Commissioner of Income Tax, Circle-3, Guwahati V. M/s. Assam Air Products (p) Ltd, Guwahati

ITA 238/GTY/2018

AI Insights

The case involves multiple appeals by the Revenue against the orders of the CIT(A) which allowed deductions under sections 80IC and 80IE of the Income Tax Act, 1961 to M/s. Assam Air Product Private Limited for the assessment years 2012-13, 2013-14, and 2014-15. The primary contention was whether the activities undertaken by the assessee, specifically the conversion of liquid oxygen into gaseous form, constituted 'manufacturing' or 'production' eligible for tax deductions. The Tribunal examined the processes involved and referenced the Supreme Court's decision in Hindustan Petroleum Corporation Ltd., which supported the assessee's position. The Tribunal found that the assessee's activities did amount to production, thereby affirming the CIT(A)'s decisions and dismissing the Revenue's appeals.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 128824 (ITAT-GUWAHATI)
• Duration Of Justice: 4 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 09-11-2022
• Assessment Year: 2012-2013
• Appeal Filed On: 16-09-2018
• Other Referred Cases: CIT vs. Hindustan Petroleum Corpn. Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Question of law
• Section: 154; 142(1); 250; 80IC; 80IC; 13; 22

Judgement Text

आयकर अपीलीय अधिकरण ग ु वाहाटी 'डीबी' पीठ, कोलकाता म ें IN THE INCOME TAX APPELLATE TRIBUNAL GUWAHATI ‘DB’ BENCH AT KOLKATA [वर् ु ु अल कोट ु ] [Virtual Court] डॉ. मनीष बोरड, ल े खा सदस्य एवं श्री संजय शमा ु , न्याधयक सदस्य क े समक्ष Before DR. MANISH BORAD, ACCOUNTANT MEMBER & SRI SONJOY SARMA, JUDICIAL MEMBER I.T.A. Nos.: 318 & 319/Gty/2018 Assessment Years: 2013-14 & 2014-15 I.T.A. Nos.: 238, 239 & 240/Gty/2018 Assessment Years: 2012-13, 2013-14 & 2014-15 ACIT, Circle-3, Guwahati.........................................Appellant Vs. M/s. Assam Air Product Private Limited.................Respondent [PAN: AABCA 1967 E] Appearances by: Smt. I. Gyaneshori Devi, JCIT, appeared on behalf of the Revenue. Sh. Ramesh Goenka, FCA, appeared on behalf of the Assessee. Date of concluding the hearing : November 10 th , 2022 Date of pronouncing the order : December 08 th , 2022 ORDER Per Manish Borad, Accountant Member: The captioned appeals filed by the Revenue pertaining to the Assessment Years (in short “AY”) 2012-13, 2013-14 & 2014-15 are directed against separate orders passed u/s 250 & 154 of the I.T.A. Nos.: 318 & 319/Gau/2018 I.T.A. Nos.: 238, 239 & 240/Gau/2018 AYs: 2012-13, 2013-14 & 2014-15 M/s. Assam Air Product Private Limited. Page 2 of 27 Income Tax Act, 1961 (in short the “Act”) by ld. Commissioner of Income-tax (Appeals), Guwahati-2, Guwahati [in short ld. “CIT(A)”] dated 29.06.2018 & 10.09.2018, respectively. 2. On going through the instant appeal files, we find that they pertain to AYs 2012-13, 2013-14 & 2014-15. So far as AY 2012- 13 is concerned ITA No. 238/Kol/2018 is there. As regards AYs 2013-14 & 2014-15 against the order of ld. CIT(A) dated 10.09.2018, Department has filed the appeal before this Tribunal in ITA Nos. 318 & 319/Kol/2018. Subsequently, ld. CIT(A) passed order u/s 154 of the Act dated 10.09.2018 and some portions of the finding were replaced by new finding. Against these orders, the Revenue is in appeal in ITA Nos. 239 & 240/Kol/2018. We observe that some of the grounds raised by the Revenue in the original appeal for AY 2013-14 & 2014-15 have not been raised in the revised appeals in ITA Nos. 239 & 240/Kol/2018 and in place of challenging the deduction claimed by the assessee u/s 80IE of the Act for units located at Sivasagar, North Lakhimpur and Duliajan, Revenue has only challenged the claim of the assessee allowed by ld. CIT(A) for Duliajan unit. 3. The Revenue is in appeal before this Tribunal raising the following grounds: I.T.A. No.: 318/Gau/2018: “(i) On the facts and circumstances of the case, the Ld. CIT(A) erred in facts as well as in law in deleting the addition/ disallowance of Rs. 1,51,53,274/- toward assessee’s claim for deduction u/s 80IE of the Income Tax Act, 1961 in respect of its industrial unit located at Duliajan. I.T.A. Nos.: 318 & 319/Gau/2018 I.T.A. Nos.: 238, 239 & 240/Gau/2018 AYs: 2012-13, 2013-14 & 2014-15 M/s. Assam Air Product Private Limited. Page 3 of 27 (ii) The appellant craves leave to add, alter or amend any or all of the grounds of appeal before or during the course of appeal.” I.T.A. No.: 319/Gau/2018: “(i) On the facts and circumstances of the case, the Ld. CIT(A) erred in facts as well as in law in deleting the addition/disallowance of Rs. 1,96,11,395/- toward assessee’s claim for deduction u/s 80IE of the Income Tax Act, 1961 in respect of its industrial unit located at Duliajan. (ii) The appellant craves leave to add, alter or amend any or all of the grounds of appeal before or during the course of appeal.” I.T.A. No.: 238/Gau/2018: “(i) That on the facts and circumstances of the case, the Ld. CIT(A) has erred in law in holding that the assessee’s activity of conversion of oxygen in its liquid form into Oxygen in gaseous form tantamount to ’production’ thereby qualifying for deduction u/s 80IC/80IE of the Income Tax Act, 1961. (ii) That on the facts and circumstances of the case, the Ld. CIT(A) erred, in facts as well as in law in deleting the addition/disallowance of Rs. 56,14,942/- toward assessee’s claim for deduction u/s 80IC of the Income Tax Act, 1961 in respect of its industrial unit located at Sivasagar. (iii) That on the facts and circumstances of the case, the Ld. CIT(A) erred in facts as well as in law in deleting the addition/ disallowance of Rs. 37,93,171/- toward assessee’s claim for deduction 80IE of the Income Tax Act, 1961 in respect of its industrial unit located at North Lakhimpur. (iv) That on the facts and circumstances of the case, the Ld. CIT(A) erred in facts as well as in law in deleting the addition/ disallowance of Rs. 1,37,24,383/- toward assessee’s claim for deduction 80IE of the Income Tax Act, 1961 in respect of its industrial unit located at Duliajan. (v) That the appellant craves leave to add, alter or amend any or all of the grounds of appeal before or during the course of appeal.” I.T.A. No.: 239/Gau/2018: “(i) That on the facts and circumstances of the case, the Ld. CIT(A) has erred in law in holding that the assessee’s activity of conversion of I.T.A. Nos.: 318 & 319/Gau/2018 I.T.A. Nos.: 238, 239 & 240/Gau/2018 AYs: 2012-13, 2013-14 & 2014-15 M/s. Assam Air Product Private Limited. Page 4 of 27 oxygen in its liquid form into Oxygen in gaseous form tantamount to ‘production’ thereby qualifying for deduction u/s 80IC/80IE of the Income Tax Act, 1961. (ii) That on the facts and circumstances of the case, the Ld. CIT(A) erred in facts as well as in law in deleting the addition/ disallowance of Rs. 1,16,25,173/- toward assessee’s claim for deduction u/s 80IC of the Income Tax Act, 1961 in respect of its industrial unit located at Sivasagar. (iii) That on the facts and circumstances of the case, the Ld. CIT(A) erred in facts as well as in law in deleting the addition/ disallowance of Rs. 56,53,5721- toward assessee’s claim for deduction 80IE of the Income Tax Act, 1961 in respect of its industrial unit located at North Lakhimpur. (iv) That on the facts and circumstances of the case, the Ld. CIT(A) erred in facts as well as in law in deleting the addition/ disallowance of Rs. 1,51,53,274/- toward assessee’s claim for deduction 80IE of the Income Tax Act, 1961 in respect of its industrial unit located at Duliajan. (v) That on the facts and circumstances of the case as well as on the points of law the Ld. CIT(A) has erred in admitting additional evidences without calling for remand report from the AO which was in clear violation of Rule 46A of the Income Tax Rules, 1962. (vi) That the appellant craves leave to add, alter or amend any or all of the grounds of appeal before or during the course of appeal.” I.T.A. No.: 240/Gau/2018: “(i) That on the facts and circumstances of the case, the Ld. CIT(A) has erred in law in holding that the assessee’s activity of conversion of oxygen in its liquid form into Oxygen in gaseous form tantamount to ‘production’ thereby qualifying for deduction u/s 80IC/80IE of the Income Tax Act, 1961. (ii) That on the facts and circumstances of the case, the Ld. CIT(A) erred in facts as well as in law in deleting the addition/ disallowance of Rs. 68,92,698/- toward assessee’s claim for deduction u/s 80IC of the Income Tax Act, 1961 in respect of its industrial unit located at Sivasagar. (iii) That on the facts and circumstances of the case, the Ld. CIT(A) erred in facts as well as in law in deleting the addition/disallowance I.T.A. Nos.: 318 & 319/Gau/2018 I.T.A. Nos.: 238, 239 & 240/Gau/2018 AYs: 2012-13, 2013-14 & 2014-15 M/s. Assam Air Product Private Limited. Page 5 of 27 of Rs. 42,88,555/- toward assessee’s claim for deduction 80IE of the Income Tax Act, 1961 in respect of its industrial unit located at North Lakhimpur. (iv) That on the facts and circumstances of the case, the Ld. CIT(A) erred in facts as well as in law in deleting the addition/ disallowance of Rs. 1,96,11,395/- toward assessee’s claim for deduction 80IE of the Income Tax Act, 1961 in respect of its industrial unit located at Duliajan. (v) That on the facts and circumstances of the case as well as on the points of law the Ld. CIT(A) has erred in admitting additional evidences without calling for remand report from the AO which was in clear violation of Rule 46A of the Income Tax Rules, 1962. (vi) That the appellant craves leave to add, alter or amend any/ all of the grounds of appeal before or during the course of appeal.” 4. As the issues raised in these appeals are common and as the facts are identical, for the sake of convenience and brevity, they are heard together and disposed off by way of this common order. From perusal of grounds of appeal, we note that Revenue has challenged the finding of ld. CIT(A) allowing the claim of the assessee towards deduction u/s 80IC of the Act for the profits earned from Sivasagar unit and for deduction claimed u/s 80IE of the Act for the profits earned from North Lakhimpur & Duliajan units. We also note that for AY 2013-14 & 2014-15 the assessee submitted rectification application before ld. CIT(A) pointing out certain apparent errors including non-adjudication of ground no. 4 raised in the respective appeal before ld. CIT(A). Further, we note that ld. CIT(A) found merit in the application u/s 154 of the Act filed for AY 2013-14 & 2014-15 and accordingly inserted some more finding to that given in the original appellate order for these two years. However, the result of all the impugned orders are similar allowing the claim of the assessee for deduction u/s I.T.A. Nos.: 318 & 319/Gau/2018 I.T.A. Nos.: 238, 239 & 240/Gau/2018 AYs: 2012-13, 2013-14 & 2014-15 M/s. Assam Air Product Private Limited. Page 6 of 27 80IC/80IE of the Act for the units located at Sivasagar, North Lakhimpur & Duliajan. Therefore, for the purpose of adjudication, we will take the facts of the case for AY 2014-15 in ITA Nos. 240/Gty/2018 & 319/Gty/2018 and our decision on adjudication of the issues raised for these two appeals shall apply mutatis mutandis on all the remaining appeals. 5. Brief facts of the case as culled out from the records are that the assessee is a private limited company engaged in the manufacturing of oxygen gas. E-return for AY 2014-15 filed on 21.11.2014 declaring income of Rs. 62,94,400/- after claiming deduction u/s 80IC/80IE of the Act for oxygen gas manufacturing and processed high pressure natural gas manufacturing for its units at Sivasagar, North Lakhimpur and Duliajan. Case selected for scrutiny through CASS followed by serving of notices u/s 143(2) & 142(1) of the Act. Ld. AO examining the claim of deduction u/s 80IC/80IE of the Act was not satisfied with the explanations/submissions given by the assessee and denied the said claim and with other minor disallowances assessed the income at Rs. 3,71,32,967/-. 6. Aggrieved, the assessee preferred appeal before ld. CIT(A) and partly succeeded. 7. Aggrieved, the Revenue is now in appeal before this Tribunal. 8. Ld. D/R, supporting the order of ld. AO stated that the assessee is not manufacturing/producing gases and is merely refuelling gases and therefore, not liable to claim deduction u/s 80IC/80IE of the Act. I.T.A. Nos.: 318 & 319/Gau/2018 I.T.A. Nos.: 238, 239 & 240/Gau/2018 AYs: 2012-13, 2013-14 & 2014-15 M/s. Assam Air Product Private Limited. Page 7 of 27 9. On the other hand, ld. Counsel for the assessee vehemently argued supporting the detailed finding of ld. CIT(A) wherein ld. CIT(A) after discussing the manufacturing/production process carried out by the assessee has further, referred to the ratio laid down by the Hon'ble Supreme Court of India in the case of CIT vs. Hindustan Petroleum Corpn. Ltd. Reported in [2017] 396 ITR 696 (SC) and allowed the assessee’s claim made u/s 80IC/80IE of the Act. 10. We have heard rival contentions and perused the records placed before us. Revenue is aggrieved with the finding of ld. CIT(A) allowing the assessee’s claim for deduction u/s 80IC of the Act for Sivasagar unit and u/s 80IE of the Act for North Lakhimpur and Duliajan units accepting that assessee’s activity of converting of oxygen in its liquid form into oxygen in gaseous form tantamount to production and thus, qualify for deduction u/s 80IC/80IE of the Act. 11. We find that ld. CIT(A) following the ratio laid down by the Hon'ble Supreme Court of India in the case of Hindustan Petroleum Corpn. Ltd. (supra) has allowed the claim of the assessee observing as follows (relevant extract): “vi. I have gone through the above submissions of the Appellant and have considered the facts and evidences on record. vii. The present appeal has been filed since the Ld. AO did not consider the production of Oxygen gas from Liquid Oxygen as production or manufacture so as to be eligible for deductions claimed by the appellant under section 801c / 80IE for its various units. A perusal of the impugned order would reveal that the appellant had claimed following deductions under respective section for the above assessment year, in respect of its different undertakings: I.T.A. Nos.: 318 & 319/Gau/2018 I.T.A. Nos.: 238, 239 & 240/Gau/2018 AYs: 2012-13, 2013-14 & 2014-15 M/s. Assam Air Product Private Limited. Page 8 of 27 A/Y Sivasagar Unit-II 80IC North Lakhimpur 80IE Duliajan 80IE 2014-15 6892968 4288555 19611395 Year of deduction 10 th Year 5 th Year 3 rd Year During the course of appellate proceedings, the appellant had relied upon its submissions filed before the Ld. AO, as well his appellate submission, contention interalia therein that the process of production of Oxygen gas from Liquid Oxygen amounts to production. The Appellant had also relied upon the ratio of the Judgment of the Hon'ble Apex Court rendered in the case of CIT vs. Hindustan Petroleum Corporation Ltd. (2017) 396 ITR 696 (S.C.) and contends that the issue is no longer resintegra, moreso when the Apex Court has held Bottling of liquefied petroleum gas obtained by an assessee from refinery which undergoes complex technical process in its plant is distinct from liquefied petroleum gas bottled in cylinders and cleared from plant for domestic use by customers. The Hon'ble court have held that such an activity amounts to 'Production' and the appellant before it was thus held entitled to deduction(s) under sections, 80HH, 80-1, 80-IA of the Income Tax Act. The judgment of the Hon'ble Apex Court in the case of CIT vs. Hindustan Petroleum Corporation Ltd. (2017) 396 ITR 696 (S.C.) is being reproduced as under: "1. A. K. Sikri J.—The question of law that arises of consideration in all these appeals, which are filed by the Commissioner of Income-tax, Mumbai, is identical. The respondents-assessees in these appeals are engaged in the process of bottling liquefied petroleum gas (LPG) cylinders meant for domestic use. They are claiming benefit of sections 80HH, 80-1 and 80-IA of the Income-tax Act, 1961 (hereinafter referred to as the "Act"). Admissibility of benefit under the aforesaid provision depends upon the question as to whether bottling of LPG is an activity which amounts to "production" or "manufacturing" for the purposes of the aforesaid provisions of the Act. 2. The Assessing Officers (AOs) had disallowed the deduction claimed by the assessees holding that they did not engage in the production or manufacture activity because of the reason that LPG was produced and manufactured in refineries and thereafter there was no change in the chemical composition or other properties of the gas in the activity of filling the cylinder. This view was affirmed by the Commissioner of Income-tax (Appeals). The Income-tax Appellate Tribunal (ITAT), however, upset the aforesaid view of the Assessing Officers after finding that LPG produced in the refineries cannot be I.T.A. Nos.: 318 & 319/Gau/2018 I.T.A. Nos.: 238, 239 & 240/Gau/2018 AYs: 2012-13, 2013-14 & 2014-15 M/s. Assam Air Product Private Limited. Page 9 of 27 directly supplied to households without bottling of the LPG into the cylinders and insofar as LPG bottling is concerned, it is a complex activity which can only be carried out by experts. In this light, it was noted that the process involved LPG suction, vapour distribution, de- classification, compression of LPG vapour, external and internal cleaning, hydro pressure testing refilling, sealing, quality control etc. and hence the activity would be a "manufacturing activity". In this hue, the Tribunal also referred to the Gas Cylinders Rules, 2004 and in particular rule 2(xxxii) thereof which defines "manufacture of gas" to mean filling of a cylinder with any compressed gas and also includes transfer of compressed gas from one cylinder to any other cylinder. On that basis, it was concluded by the Tribunal that the activity of filling of cylinder with compressed gas amounts to "production" or "manufacture" for the purposes of sections 80HH, 80- 1 and 80-IA of the Act as well. The High Court has concurred with the view of the Income-tax Appellate Tribunal. This is how the Department is before this court and insists that the process of bottling LPG cylinder in domestic use does not amount to manufacture. 3. Before discussing the aforesaid central issue which has arisen for consideration, it may be noted that section 80-1 of the Act provides for certain amount of deductions in respect of profits and gains derived from an industrial undertaking or a ship or the business of a hotel or the business of repairs to ocean-going vessels or other powered craft to which the said section applies. Section 80-IA gives similar benefits to those industrial undertakings or enterprises which are engaged in infrastructure development. Section 80HH, on the other hand, entitles deduction in respect of profits and gains from a newly established undertaking or a hotel business in backward areas. 4. As mentioned above, all the assessees are in the business of bottling LPG cylinder and according to them they are industrial undertakings and the aforesaid process amounts to production or manufacture. Since, manufacture or production of articles is sine qua non for treating these assessees as industrial undertakings and for the applicability of the aforesaid provisions, it is essential to establish that the assessees are industrial undertakings. It is in this context the question mooted above has arisen for consideration. 5. Learned counsel appearing for the Revenue opened his arguments by referring to the order of the Assessing Officer in Civil Appeal No. 9295 of 2017. He pointed out that before passing the assessment I.T.A. Nos.: 318 & 319/Gau/2018 I.T.A. Nos.: 238, 239 & 240/Gau/2018 AYs: 2012-13, 2013-14 & 2014-15 M/s. Assam Air Product Private Limited. Page 10 of 27 order, the Assessing Officer had issued a questionnaire to the assessee to explain: (a) the process of LPG manufacturing; (b) activities carried out in the bottling plants; and (c) detailed submission on the issue of eligibility and allowability of such case. 6. Insofar as process of LPG manufacturing is concerned, the Assessing Officer noted that the assessee had narrated the same in the following form: "LPG (Liquefied Petroleum Gas), which is used as a fuel for domestic purposes as well as in commercial and industrial establishments is obtained by refining of crude in the crude distillation units and Catalytic Crackers of the refinery. It generally consists of butane, propane and butane and propane mixtures. In the refinery, the plant is fed with natural gas and crude oil. The feed gas and the gas under goes a chilling up to a temperature of 22 degree centigrade and 37 degree centigrade. In the first stage, when it is chilled to 22 degree centigrade, the liquefied hydrocarbon formed is separated out and the vapour is further chilled to 37 degree centigrade. The liquefied hydrocarbons from both stages are then fractionated in two stages. The heavier fractionation is obtained from the bottom of first fractionators, the top product from the second column is LPG, which is sent for bottling. 7. Response of the assessee to the question pertaining to activities carried out in the bottling plants was as under: "The LPG is generally used for commercial/industrial applications as well as for domestic applications. While LPG is marketed to industrial customers by filling the same into the LPG tanks/tankwagens directly from the refineries, the LPG for domestic applications has to be necessarily filled into the LPG cylinders. Unless LPG is filled into the cylinders, the same cannot be used as a domestic fuel, since LPG which is a gaseous substance in ambient temperature has to be com pressed into liquefied stage, the flow of which shall be controlled by the value fitted on to the cylinder. Accordingly, in order to facilitate the convenience of handling as well as to make it usable as domestic fuel, bulk LPG from the refineries are transported to the LPG bottling plants situated in different places, (more proximate to the customers' I.T.A. Nos.: 318 & 319/Gau/2018 I.T.A. Nos.: 238, 239 & 240/Gau/2018 AYs: 2012-13, 2013-14 & 2014-15 M/s. Assam Air Product Private Limited. Page 11 of 27 place) and then filled into the cylinder by a very sophisticated process. The activity carried out in the various LPG bottling plants are as below: • Receipt of bulk LPG through tankers/tank wagons, its unloading and storage into spheres/bullets. • Receipt of LPG cylinders from manufacturers, distributors and repairers. • Receipt of valves, regulators and consumable spare for operation/ running of the plants. • Refilling/bottling of LPG in cylinders by compressing the same into liquid. • Storage of LPG packed cylinders. • Despatch of packed cylinders to LPG. •Distributors for a€" illegible. • Maintenance/upkeeping of plant equipment to ensure smooth operation of plant. • Imparting necessary training to the employees, contract workmen and transporters crew to ensure safe operation/handling of LPG/LPG cylinders in plant and enroot." 8. After taking note of reply to the aforesaid two questions, the Assessing Officer proceeded to decide as to whether the assessee was an industrial undertaking and whether it is manufacturing or producing article. He noted the decision of the Gujarat High Court in the case of State of Gujarat v. Kosan Gas Company*, wherein identical facts are involved, viz. the assessee therein after purchasing LPG from M/s. HPCL was refilling the same into small cylinders and the High Court held that the said process did not amount to manufacture: The Assessing Officer, thereafter, dealt with the contention of the assessee predicated on section 10A of the Act wherein Explanation (Hi) mentions that manufacture includes assembling as well and, therefore, the assessee's case was covered by the definition of "manufacture" under section 10A of the Act. This contention was, however, rejected by the Assessing Officer by pointing out that the definition of "manufacture" as given in the Explanation (iii) to section 10A of the Act is for limited purposes in the context of newly established industrial undertakings in free trade I.T.A. Nos.: 318 & 319/Gau/2018 I.T.A. Nos.: 238, 239 & 240/Gau/2018 AYs: 2012-13, 2013-14 & 2014-15 M/s. Assam Air Product Private Limited. Page 12 of 27 zone and the very explanation starts with the phrase "for the purposes of this section". The Assessing Officer further noticed that the word "manufacture" is not defined in the Act. He, therefore, proceeded to turn to the legal and general definitions available elsewhere and referred to corpus jurissecundum and also certain cases of this court dealing with the issue. On that basis, the Assessing Officer concluded that "manufacture" can be said to be a process or activity which brings into existence a new identifiable and distinctive goods and the commodity which 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 Assessing Officer also referred to the legal dicta laying down the principle that the test is not whether what is produced as a result of the process carried out in the plant becomes more saleable from an otherwise less saleable article. Simply because a process carried out on a particular article adds to its value or improves its marketability on account of processes like shining, polishing, removal of impurities etc., meant by itself be sufficient to hold that the product so finished is commercially different from the one on which such a process had been carried out. The value addition, therefore, does not amount to production or manufacture. On that basis, the Assessing Officer concluded that since no new product had come into existence after going through the process undertaken by the assessees and it remained the same product, namely, LPG, the process of filling up of the gas into cylinder was not a manufacturing process. 9. Heavily relying upon the aforesaid reasoning of the Assessing Officer, the learned counsel for the Revenue submitted that this view is consistently taken in catena of judicial pronouncements and, therefore, should be accepted. He also referred to the following judgments in support of his contention: Servo-Med Industries Private Limited v. Commissioner of Central Excise* and CIT v. Tara Agencies**. 10. The aforesaid submissions were refuted by Mr. TarunGulati, learned counsel appearing for the assessee M/s. Hindustan Petroleum Corporation Limited. He explained the LPG bottling process by pointing out that the traditional source of LPG is oil refineries where crude oil is processed. LPG vapour is one of the lighter fractions produced by oil refining and petrochemical processes. Since LPG typically consists of a mixture of propane, propylene, butane and butylene (containing 3 or 4 carbon atoms per molecule), these hydrocarbons are easily liquefied by moderate compression at I.T.A. Nos.: 318 & 319/Gau/2018 I.T.A. Nos.: 238, 239 & 240/Gau/2018 AYs: 2012-13, 2013-14 & 2014-15 M/s. Assam Air Product Private Limited. Page 13 of 27 ambient temperature. Unlike natural gas which can be piped to the consumer, LPG has to be transported in the liquid phase at ambient temperature and, therefore, required to be handled in specially designed pressure vessels. Once the LPG vapour is subjected to moderate pressure to achieve liquefaction, the resultant liquid must be contained within a pressurized system or a pressure vessel until it is required as gas by the consumer. In the vapour phase, LPG exists as a heavier gas and on liquefaction, its volume reduces considerably***. 11. Learned counsel submitted that sections 80HH, 80-1 and 80-IA of the Act use the expression "manufacture" or "production", therefore, whenever industrial undertaking is either manufacturing or producing an article, it will be entitled to the benefit of the aforesaid provisions, subject to satisfying other conditions laid down in those sections. His argument was that the activities undertaken by the assessees in their bottling plant results in the production of a new commercial product which is made suitable for domestic use, which would otherwise not be possible without undergoing such processes. Gas produced by refineries is not usable as such by the consumer for domestic use. It requires several complex processes to bottle the gas in cylinders to make it usable by domestic consumers. After LPG is bottled in cylinders the product obtains a different name, character and use which is different from its original components. A domestic consumer identifies bottled LPG as a product different from the LPG produced in the refinery or from the empty cylinder. Even otherwise, the word "production" is wider than the word "manufacture" and any activity which makes a product marketable and usable to the consumer would be covered by the word "production". Learned counsel referred to the judgment of this court in ITO v. Arihant Tiles and Marbles P. Ltd. * wherein this court has held that the word "production" is wider in ambit and has a wider connotation than the word "manufacture". He also sought to draw sustenance from the judgment of this court in Vadilal Chemicals Ltd. v. State of A. P.** wherein this court held that bottling of ammonia amounts to manufacture. He also took support from the definition of "manufacture of gas" occurring in rule 2(xxv) of the erstwhile Gas Cylinders Rules, 1981 issued under the Explosives Act, 1881 which defines the aforesaid expression to mean filling of a cylinder with any compressed gas and also includes transfer of compressed gas from one cylinder to any other cylinder. He further pointed out that even Gas Cylinders Rules, 2004 which superseded the aforesaid Rules of 1981 contain identical definition of "manufacture of gas" in rule 2(xxxii). His submission was that this I.T.A. Nos.: 318 & 319/Gau/2018 I.T.A. Nos.: 238, 239 & 240/Gau/2018 AYs: 2012-13, 2013-14 & 2014-15 M/s. Assam Air Product Private Limited. Page 14 of 27 definition itself provides legislative intent as well as that of the Central Government treating the process as manufacture of gas. Mr. Gulati also argued that for the purposes of section 80-IB of the Act, which provides a deduction for industrial undertaking established in the North Eastern region, the Central Government has notified vide Notification No. S. O. 627(E), dated August 4, 1999, eligible industries and the following entry is relevant for the purposes of the instant appeals ([1999] 239ITR (St.) 47, 49): "13. Gas based intermediate products industry manufacturing or producing— (i) Gas exploration and production; (ii) Gas distribution and bottling; (iii) Power generation; (iv) Plastics; (v) Yarn raw materials; (vi) Fertilizers; (vii) Methanol; (viii) Formal debycle and FR Resin Melamme and MF Resin; (ix) Methylamine, hexamethiene, tetranine, ammonium bi-carbonate; (x) Nitrite acid and ammonium nitrate; (xi) Carbon black; (xii) Polymer chips, (emphasis supplied)" It was contended that from the above, it is clear that an undertaking engaged in bottling of gas is considered to be involved in manufacture or production for the purpose of deductions under the Act and this view has been taken by the Central Government itself. 12. Learned counsel argued that the findings of the Tribunal, as upheld by the High Court, were not assailed by the Department and, therefore, there was no question of law involved. He also referred to the few judgments of different High Courts which have taken the view that LPG bottling would amount to manufacture and pointed out that in those cases, no appeal was preferred by the Department. Learned counsel also endeavoured to distinguish the judgment of the Gujarat I.T.A. Nos.: 318 & 319/Gau/2018 I.T.A. Nos.: 238, 239 & 240/Gau/2018 AYs: 2012-13, 2013-14 & 2014-15 M/s. Assam Air Product Private Limited. Page 15 of 27 High Court in Kosan Gas Company's case as well as the judgments of this court which have been relied upon by / the learned counsel for the Revenue and submitted that those judgments have no applicability. He, thus, pleaded that the appeals of the appellant/ Revenue deserve to be dismissed. 13. Mr. ParijatSinha, who appeared for some other assessees, argued almost on the same lines. 14. We have given adequate consideration to the respective submissions of both the parties, which they deserve. As is clear from the facts and arguments noted above, the question of law which is involved (already mentioned) is: "Whether bottling of LPG, as undertaken by the assessee, is a process which amounts to 'production' or 'manufacture' for the purposes of sections 80HH, 80-1 and 80-IA of the Act?; and if so, whether the respondents/assessees are entitled to claim the benefit of deduction under the aforesaid provisions while computing their tax able income ?" 15. At the outset, it needs to be emphasised that the aforesaid provisions of the Act use both the expressions, namely, "manufacture" as well as "production". It also becomes clear after reading these provisions that an assessee whose process amounts to either "manufacture" or "production" (i.e., one of these two and not both) would become entitled to the benefits enshrined therein. It is held by this court in Arihant Tiles and Marbles P. Ltd. case that the word "production" is wider than the word "manufacture". The two expressions, thus, have different connotation. Significantly, Arihant Tiles judgment decides that cutting of marble blocks into marble slabs does not amount to manufacture. At the same time, it clarifies that it would be relevant for the purpose of the Central Excise Act. When it comes to interpreting section 80-IA of the Act (which was involved in the said case), the court was categorical in pointing out that the aforesaid interpretation of "manufacture" in the context of Central Excise Act would not apply while interpreting section 80-IA of the Act as this provision not only covers those assessees which are involved in the process of manufacture but also those who are undertaking "production" of the goods. Taking note of the judgment in CIT v. Sesa Goa Ltd. * which was rendered in the context of section 32A of the Act and which provision also applies in respect of "production", the court reiterated the ratio in Sesa Goa Ltd. to hold that the word "production" was wider than the word "manufacture". On that basis, finding I.T.A. Nos.: 318 & 319/Gau/2018 I.T.A. Nos.: 238, 239 & 240/Gau/2018 AYs: 2012-13, 2013-14 & 2014-15 M/s. Assam Air Product Private Limited. Page 16 of 27 arrived at by the court was that though cutting of marble blocks into marble slabs did not amount to "manufacture", if there are various stages through which marble blocks are subjected to before they become polished slabs and tiles, such activity would certainly be treated as "production " for the purpose of section 80-IA of the Act. In this context, relevant discussion contained in Arihant Tiles case heeds to be reproduced, which is as under (page 86 of 320 ITR): "In the present case, we have extracted in detail the process under taken by each of the respondents before us. In the present case, we are not concerned only with cutting of marble blocks into slabs. In the present case we are also concerned with the activity of polishing and ultimate conversion of blocks into polished slabs and tiles. What we find from the process indicated hereinabove is that there are various stages through which the blocks have to go through before they become polished slabs and tiles. In the circumstances, we are of the view that on the facts of the cases in hand, there is certainly an activity which will come in the category of 'manufacture' or 'production' under section 80-1A of the Income-tax Act. As stated hereinabove, the judgment of this court in Aman Marble Industries (P.) Ltd. v. Collector of Central Excise [2005] 1 SCC 279; [2003] 157 ELT 393 (SC) was not required to construe the word 'production' in addition to the word 'manufacture'. One has to examine the scheme of the Act also while deciding the question as to whether the activity constitutes manufacture or production. Therefore, looking to the nature of the activity stepwise, we are of the view that the subject activity certainly constitutes 'manufacture or production' in terms of section 80-IA. In this connection, our view is also fortified by the following judgments of this court which have been fairly pointed out to us by learned counsel appearing for the Department. In the case of CIT v. Sesa Goa Ltd. reported in [2004] 13 SCC 548; [2004] 271 ITR 331 (SC), the meaning of the word 'production' came up for consideration. The question which came before this court was whether the Income-tax Appellate Tribunal was justified in holding that the assessee was entitled to deduction under section 32A of the Income-tax Act, 1961, in respect of machinery used in mining activity ignoring the fact that the assessee was engaged in extraction and processing of iron ore, not amounting to manufacture or production of any article or thing. The High Court in that case, while dismissing the appeal preferred by the Revenue, held that extraction and processing of iron ore did not amount to 'manufacture'. However, it came to the conclusion that extraction of iron ore and the various processes would involve 'pro duction' within the meaning of section 32A(2)(b)(iii) of the I.T.A. Nos.: 318 & 319/Gau/2018 I.T.A. Nos.: 238, 239 & 240/Gau/2018 AYs: 2012-13, 2013-14 & 2014-15 M/s. Assam Air Product Private Limited. Page 17 of 27 Income-tax Act, 1961 and consequently, the assessee was entitled to the benefit of investment allowance under section 32A of the Income- tax Act. In that matter, it was argued on behalf of the Revenue that extraction and processing of iron ore did not produce any new product whereas it was argued on behalf of the assessee that it did produce a distinct new product. The view expressed by the High Court that the activity in question constituted 'production' has been affirmed by this court in Sesa Goa Ltd. case [2004] 13 SCC 548; [2004] 271 ITR 331 saying that the High Court's opinion was unimpeachable. It was held by this court that the word 'production' is wider in ambit and it has a wider connotation than the word 'manufacture'. It was held that while every manufacture can constitute production, every production did not amount to manufacture. In our view, applying the tests laid down by this court in Sesa Goa Ltd. case [2004] 13 SCC 548; [2004] 271 ITR 331 and applying it to the activities undertaken by the respondents herein, reproduced hereinabove, it is clear that the said activities would come within the meaning of the word 'production'." 16. Keeping the aforesaid distinction in mind, let us take note of the process of LPG bottling that is undertaken by the assessees herein and about which there is no dispute. It has come on record that specific activities at the assessees’ plant include receiving bulk LPG vapour from the oil refinery, unloading the LPG vapour, compression of the LPG vapour, loading of the LPG in liquefied form into bullets, followed by cylinder filling operations. The stages of these activities are as under: (a) Bulk LPG is received in the bottling plant through road tankers/ rail wagons; (b) The LPG is unloaded into spheres/bullets through LPG compressors which use variable levels of pressure for suction, unloading and vapourrecovery; (c) Refilling/bottling of LPG in cylinders by compressing the same into liquid form; and (d) Capping, fixing of seals and safety valves prior to storage and loading of filled cylinders. 17. Thus, after the bottling activities at the assessees' plants, LPG is stored in cylinders in liquefied form under pressure. When the cylinder valve is opened and the gas is withdrawn from the cylinder, the pressure falls and the liquid boils to return to gaseous state. This is how LPG is made suitable for domestic use by customers who will I.T.A. Nos.: 318 & 319/Gau/2018 I.T.A. Nos.: 238, 239 & 240/Gau/2018 AYs: 2012-13, 2013-14 & 2014-15 M/s. Assam Air Product Private Limited. Page 18 of 27 not be able to use LPG in its vapour form as produced in the oil refinery. It, therefore, becomes apparent that the LPG obtained from the refinery undergoes a complex technical process in the assessees' plants and is clearly distinguishable from the LPG bottled in cylinders and cleared from these plants for domestic use by customers. It may be relevant to point out that keeping in view the aforesaid process, the Income-tax Appellate Tribunal arrived at the specific findings in support of its decision, which are as under: (a) There is no dispute that the LPG produced in the refinery cannot be directly supplied to the consumer for domestic use because of various reasons of handling, storage and safety. (b) LPG bottling is a highly technical and complex activity which requires precise functions of machines operated by technically expert personnel. (c) Bottling of LPG is an essential process for rendering the product marketable and usable for the end customer. (d) The word "production" has a wider connotation in comparison to "manufacture", and any activity which brings a commercially new product into existence constitutes production. The process of bottling of LPG renders it capable of being marketed as a domestic kitchen fuel and, thereby, makes it a viable commercial product. 18. In the considered opinion of this court, the aforesaid activity would definitely fall within the expression "production". We agree with the submission of the learned counsels for the assessees that the definition of "manufacture of gas" in rule 2(xxxii) of the Gas Cylinders Rules, 2004 also supports the case of the assessees inasmuch as gas distribution and bottling is treated as manufacturing or producing gas. We are also inclined to accept the submission of the learned counsel for the assessees that various High Courts have, from time to time, decided that bottling of gas into cylinder amounts to production and, therefore, claim of deduction under sections 80HH, 80-1 and 80- IA would be admissible. Another important aspect which was highlighted by learned counsels for the assessees was that identical issue whether bottling of gas into cylinder amounts to production for claim of deduction under the Act has been considered by various High Courts and decided in the affirmative but those decisions were not challenged by the Department. The cases specifically referred were Puttur Petro Products Pvt. Ltd. v. Asst. CIT* and Central U.P. Gas Ltd. v. Deputy CIT**. I.T.A. Nos.: 318 & 319/Gau/2018 I.T.A. Nos.: 238, 239 & 240/Gau/2018 AYs: 2012-13, 2013-14 & 2014-15 M/s. Assam Air Product Private Limited. Page 19 of 27 19. From the submissions made by learned counsel for the Revenue, who banked on the reasoning given by the Assessing Officer, it can be gathered that the entire thrust of the Assessing Officer was that the process involved in filling up the gas into cylinders does not amount to "manufacture" inasmuch as the said process does not bring into existence a new identifiable and distinctive goods. In the first instance, no distinction was drawn between manufacture and production and the matter was not looked into from the angle as to whether the aforesaid process would amount to production or not. Other reason which prevailed with the Assessing Officer and which was also the argument of the learned counsel for the Revenue was that, on identical facts, the Gujarat High Court had held that refilling the LPG after purchasing from M/s. HPCL into small cylinders would not amount to manufacture. That was a case which was decided in the context of the Gujarat Sales tax Act, 1969. The court held that transfer of LPG from bulk containers into cylinders did not amount to process of manufacture. It is pertinent to point out that section 2(16) of the Gujarat Sales tax Act, 1969 defines "manufacture" and, therefore, the entire case was examined keeping in view the said definition of "manufacture" and the issue was as to whether the process amounted to manufacture or not. As pointed out above, the question as to whether it amounts to "production" as well did not arise for consideration. The Assessing Officer committed manifest error in relying upon the said decision inasmuch as the provisions with which we are concerned in the instant case use the words "manufacture or production" and are not limited to "manufacture" alone. 20. The judgment in the cases of Servo-Med Industries Private Limited and Tara Agencies, which were cited by the learned counsel for the Revenue, may not apply to the present case. They dealt with the provision of the Central Excise Act and, therefore, test of "manufacture" propounded on that case would not be applicable when dealing with the cases under the provisions of sections 80HH, 80-1 and 80-IA of the Act which use both the expressions "manufacture" and "production". It has already been clarified in Vadilal Chemicals Ltd.'s judgment. In so far as the judgment in Tara Agencies is concerned, the factual scenario therein was totally different where three different stages in relation to tea were examined by this court. The court held that the procedure of blending of different qualities of tea would amount to "processing of tea" and it did not amount to "manufacture or production of tea". Here, the case set up by the assessees is not that bottling of LPG is "processing" as distinguished from "manufacture" or "production". We may, at this juncture, refer to I.T.A. Nos.: 318 & 319/Gau/2018 I.T.A. Nos.: 238, 239 & 240/Gau/2018 AYs: 2012-13, 2013-14 & 2014-15 M/s. Assam Air Product Private Limited. Page 20 of 27 the judgment of this court in CIT v. Vinbros and Co. * where bottling and blending of alcohol is held to be "manufacture or production "for the purpose of section 80-IB of the Act. 21. We, thus, find that the view of the Income-tax Appellate Tribunal as affirmed by the High Court is correct and, therefore, there is no merit in these appeals which are accordingly dismissed." I find from the perusal of the submissions made before me and also on the strength of the judgment of the Hon'ble Apex Court that the activity of the appellant is also similar to that of M/s HPCL, wherein the appellant compresses the Liquid Oxygen into oxygen gas in Gas cylinders by following a complex process and thus, it also tantamount to 'Production'. In fact, it would be appreciated from the submissions of the appellant that the appellant's activity involves the following process: "Process Description: Oxygen gas bottling plant comprises of five main components. They are: a) A cryogenic vacuum insulated vessel called Vacuum Insulated Static Tank (VIST) b) A cryogenic pump for pumping liquid oxygen from the tank to cylinders through heat exchanger (Vaporizer) c) A Liquid Oxygen Vaporizer d) A manifold for filling cylinders with Oxygen gas e) Industrial and oxygen cylinders for filling and storing compressed gas Liquid Oxygen (LOX) is brought by cryogenic tankers and unloaded into the VIST (a) The stored liquid Oxygen in the tank is sucked by the cryogenic pump (b) And delivered to the Vaporizer (c) The Liquid Oxygen in the Vaporizer becomes Oxygen gas due to exchange of heat between the Vaporizer and the ambient air. The outgoing product of the Vaporizer is Oxygen gas that goes through the manifold (d) Into Oxygen cylinders I.T.A. Nos.: 318 & 319/Gau/2018 I.T.A. Nos.: 238, 239 & 240/Gau/2018 AYs: 2012-13, 2013-14 & 2014-15 M/s. Assam Air Product Private Limited. Page 21 of 27 (e) The cylinders are filled to a pressure of 150 Kg/cm2 by the pump having a capacity of pumping at the rate of 250 cum/hr. The VIST has a LOX storage capacity of 10,000 liters (=8770 cum) and the vaporizer has a capacity of vaporizing 300 cum/hr of LOX into gas." It is to be noted that the above process of the appellant, is akin to the activity which the Hon'ble Supreme Court had appreciated in Paras 6, 7 & 16 of the above judgment and held the same to be Production. In fact, I further find that the Liquid Oxygen persebe cannot be directly supplied to the consumer for use because of various reasons of handling, storage and safety. I further find that in the case of the appellant, the appellant had made a reference to the Ministry of Micro. Small and Medium Enterprises, Bamunimaidam, Guwahati, for examining as to whether the appellants activity amounts to manufacture or otherwise. In this regard, it is pertinent to mention that the appellant had filed a copy of Letter No. Chem6(19)/Corres/2015-16/3419 dated 22.09.2015 issued by the Ministry of Micro. Small and Medium Enterprises. Bamunimaidam. Guwahati (Annexure - "B" at pages 2 to 15), wherein, after detail study and observation of the appellants process/activity, the said Ministry of Micro, Small and Medium Enterprises, Bamunimaidam, Guwahati recommend that all the four units of the appellant are manufacturing units (Small Enterprises) and are eligible for CCIS benefit under IMEIIPP. "On account of the above reasons, where the process of the appellant is akin to the one as referred in the judgment of the Hon'ble Apex Court Supra, I find no hesitation in holding that the activity of the appellant of conversion of oxygen in its liquid form into Oxygen in gaseous form for industrial and medical purpose amounts to 'Production' and therefore, being so is exigible for claim of deduction under section 80IC as well as under section 80IE of the Act. The above grounds of appeal are allowed. 9. In the result, the appeal is partly allowed. In the result the appeal is decided as above.” 12. Further, we find that subsequent to the application for AY 2013-14 & 2014-15 u/s 154 of the Act pointing out certain apparent mistakes in the order of ld. CIT(A), the same were examined by ld. CIT(A) and on finding merit in these applications, made certain changes in the original orders and more specifically I.T.A. Nos.: 318 & 319/Gau/2018 I.T.A. Nos.: 238, 239 & 240/Gau/2018 AYs: 2012-13, 2013-14 & 2014-15 M/s. Assam Air Product Private Limited. Page 22 of 27 in the last para of the original orders and vide order dated 10.09.2018 incorporated the following observations in its finding: “3. After the receipt of the aforesaid application from the appellant, the appellate records of the Appellant were called for and examined. On such examination it is seen that the undersigned inadvertently omitted certain observations in the last para of decision/appeal order. Since there are mistakes apparent from records in the original appeal order, the same are being rectified as hereunder: In the original appeal order the last para of the Appeal Order read as under: "It is to be noted that the above process of the appellant, is akin to the activity which the Hon'ble Supreme Court had appreciated in Para 6,7 & 16 of the above judgment and held the same to be Production. In Fact, I further find that the Liquid Oxygen perse be cannot be directly supplied to the consumer for use because of various reasons of handling, storage and safety. I further find that in the case of the appellant, the appellant had made a reference to the Ministry of Micro, Small and Medium Enterprises, Bamunimaidan, Guwahati, for examining as to whether the appellants activity amounts to manufacture or otherwise. In this regard, it is pertinent to mention that the appellant had filed a copy of Letter No. Chem6(19)/Corres/2015-16/3419 dated 22.09.2015 issued by the Ministry of Micro, Small and Medium Enterprises, Bamunimaidan, Guwahati (Annexure -"B" at pages 2 to 15), wherein, after detail study and observation of the appellants process/activity, the said Ministry of Micro, Small and Medium Enterprises, Bamunimaidan, Guwahati recommend that all the four units of the appellant are manufacturing units (Small Enterprises) and are eligible for CCIS benefit under NEIPP." On account of the above reasons, where the process of the appellant is akin to the one as referred in the judgment of the Hon'ble Apex Court Supra, I find no hesitation in holding that the activity of the appellant of conversion of oxygen in its liquid form into Oxygen in gaseous form for industrial and medical purpose amounts to 'Production' and therefore, being so is eligible for claim of deduction under section 80IC as well as under section 80IE of the Act. The above grounds of appeal are allowed." With the view to rectify the said appeal order, instead of the aforesaid last para as enumerated in the aforesaid appeal order, by way of rectification, the following para is substituted-. I.T.A. Nos.: 318 & 319/Gau/2018 I.T.A. Nos.: 238, 239 & 240/Gau/2018 AYs: 2012-13, 2013-14 & 2014-15 M/s. Assam Air Product Private Limited. Page 23 of 27 "Similarly, from the Enquiry Report dated 22.01.2015 of the Inspector of Income Tax, quoted in the Assessment Order, it is noted that the following processes are carried out at the Duliajan unit: "Raw Natural Gas (RNG) - a mixture of oil, water and gas is the raw material, which is piped into the plants from the Oil Collecting Station (OCS) of nearby oilfields of Oil India Ltd. The RNG undergoes a process or separation in a Knock Out Vessel (KOV), whereby the oil and water are separated and piped back to the OCS, while the gas is piped to the Natural Gas Compressor (NGC) - the main machinery component of the plant. In the NGC, the gas goes through two stages of compression, by which NGL and PHNPG is obtained. The NGL is piped back to the OCS and the same is spiked in crude oil to improve the quality of petroleum products obtained from oil refineries. The PHPNG is piped to the gas grid of Oil India Limited and the same is supplied through pipelines for domestic and other uses." It is also noted that the raw material and the finished products have different compositions and while the raw material is in the gaseous state, one of the finished products is in gaseous state and the other is in liquid state. Both the above processes of the appellant, viz, compressing Oxygen gas in to cylinders and compressing Natural Gas in to pipeline, are akin to the activity which the Hon'ble Supreme Court had appreciated in Paras 6, 7 & 16 of the above Judgment and held the same to be Production. In fact, I further find that the Liquid Oxygen per se be cannot be directly supplied to the consumer for use because of various reasons of handling, storage and safety. Similarly, Raw Natural Gas at low pressure cannot be used commercially and is flared/burnt. Whereas High Pressure Natural Gas is suitable for transport through pipelines for supply to power plants to generate electricity and in fertilizer plants, domestic consumers, etc. Natural Gas Liquid (NGL) is added to crude oil to improve its quality. It may be relevant to point out the similarities of the present appeal with the Hon'ble Apex Court Supra: a) There is no dispute that Liquid Oxygen and low pressure Natural Gas cannot be directly supplied to consumers because of various reasons, similar to LPG produced in the refinery. b) Oxygen bottling and Natural Gas compression are highly technical and complex activities requiring precise functions of machines operated by technically expert personnel, similar to LPG bottling. I.T.A. Nos.: 318 & 319/Gau/2018 I.T.A. Nos.: 238, 239 & 240/Gau/2018 AYs: 2012-13, 2013-14 & 2014-15 M/s. Assam Air Product Private Limited. Page 24 of 27 c) Bottling of Oxygen gas and pressurizing and purification of Natural Gas are essential process for rendering the products marketable and usable - the end consumer, like bottling of LPG. d) The word "production" has a wider connotation in comparison to "manufacture", and any activity which brings a commercially new product into existence constitutes production. The process of bottling of Oxygen and pressurization and purification of Natural Gas renders them capable of being marketed and thereby, makes it a viable commercial product, just like bottling of LPG. I further find that in the case of the appellant, the Commissioner of Industries & Commerce, Govt of Assam had made a reference to the Ministry of Micro, Small and Medium Enterprises, Bamunimaidan, Guwahati, for examining as to whether the appellan'ts activity amounts to manufacture or otherwise. In this regard, it is pertinent to mention that the appellant had filed a copy of Letter No. Chem6(19)/Corres/2015-16/3419 dated 22.09.2015 issued by the Ministry of Micro, Small and Medium Enterprises, Bamunimaidan, Guwahati (Annexure - "B" at pages 2 to 15), wherein, after detail study and observation of the appellants process/activity, the said Ministry of Micro, Small and Medium Enterprises, Bamunimaidan, Guwahati recommend that all the four units of the appellant are manufacturing units (Small Enterprises) and are eligible for CCIS benefit under NEIPP. On account of the above reasons, where the processes of the appellant are akin to the one referred in the judgement of the Hon'ble Apex Court Supra, I find no hesitation in holding that the activity of the appellant of conversion of Oxygen in its liquid form into Oxygen in gaseous form for industrial and medical consumers and conversion of low pressure Natural gas in gaseous form to high pressure Natural Gas and Natural Gas Liquid in liquid form to supply to power plant, fertilizer plant and domestic consumers amounts to "Production" and therefore, being so is eligible for claim of deduction under section 80IC as well as under section 80IE of the Act. I have also gone through the observation of the Assessing Officer that "Goods falling under Chapter 27 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), produced by petroleum oil and gas refineries are excluded U/S 80 IE and hence Duliajan unit of the appellant is not eligible for deductions U/S 80-IE of the Income Tax Act, 1961. While there is no dispute that Processed High Pressure Natural Gas and Natural Gas Liquid are under Chapter 27 of the I.T.A. Nos.: 318 & 319/Gau/2018 I.T.A. Nos.: 238, 239 & 240/Gau/2018 AYs: 2012-13, 2013-14 & 2014-15 M/s. Assam Air Product Private Limited. Page 25 of 27 Central Excise tariff Act, they are not produced by petroleum oil and gas refineries in the instant case and therefore, the exclusion clause of Sec 80IE is not applicable. The grounds of appeal under 3, 4 and 5 are allowed." 13. From perusal of the above finding of ld. CIT(A) given in the order u/s 250 of the Act as well as u/s 154 of the Act allowing the assessee’s claim for deduction u/s 80IC/80IE of the Act for the units located at Sivasagar, North Lakhimpur and Duliajan, we note that ld. CIT(A) has followed the ratio laid down by the Hon'ble Apex Court in the case of Hindustan Petroleum Corpn. Ltd. (supra) and has analysed the details and the process carried out by the assessee of converting the liquid oxygen into oxygen in gaseous form and also observing that bulk LPGs is received in the bottling plants located at respective units and then unloading in the spheres/bullets through LPG compressors having variable levels of pressure for suction, unloading and vapour recovery and thereafter refilling/bottling of the LPG in cylinders and then conversion of the same in gaseous form for the industrial and medical consumers and after analysing this process ld. CIT(A) has rightly arrived to the conclusion that the assessee is engaged in the production activity and thus, eligible for deduction u/s 80IC/80IE of the Act. Since ld. D/R has failed to controvert these facts and the applicability of the ratio laid down by the Hon'ble Apex Court Hindustan Petroleum Corpn. Ltd. (supra) by placing any other binding precedence in its favour and since all other necessary requirements as provided u/s 80IC/80IE of the Act have been complied, we fail to find any infirmity in the finding of ld. CIT(A) and thus, all the grounds of appeal raised by the Revenue I.T.A. Nos.: 318 & 319/Gau/2018 I.T.A. Nos.: 238, 239 & 240/Gau/2018 AYs: 2012-13, 2013-14 & 2014-15 M/s. Assam Air Product Private Limited. Page 26 of 27 for AY 2014-15 in ITA Nos. 240/Gty/2018 & 319/Gty/2018 are dismissed. 14. As far as the remaining appeals are concerned in ITA Nos. 238/Gty/2018 for AY 2012-13 and 239/Gty/2018 & 318/Gty/2018 for AY 2013-14 the issues raised are similar to those raised for AY 2014-15 as discussed and adjudicated above and are only confined to the issue that whether the assessee is eligible for deduction u/s 80IC/80IE of the Act and we, therefore, apply our finding given for AY 2014-15 in preceding para 13, mutatis mutandis on the issues raised for these three appeals for AY 2012-13 & 2013-14 and hold that there is no infirmity in the finding of ld. CIT(A) allowing the assessee’s claim and thus, all the grounds of appeal raised by the Revenue in ITA No. 238/Gty/2018 for AY 2012-13, ITA Nos. 239/Gty/2018 & 318/Gty/2018 for AY 2013-14 are dismissed. 15. In the result, all the appeals filed by the Revenue are dismissed as per terms indicated above. Kolkata, the 08 th December, 2022. Sd/- Sd/- [Sonjoy Sarma] [Manish Borad] Judicial Member Accountant Member Dated: 08.12.2022 Bidhan (P.S.) I.T.A. Nos.: 318 & 319/Gau/2018 I.T.A. Nos.: 238, 239 & 240/Gau/2018 AYs: 2012-13, 2013-14 & 2014-15 M/s. Assam Air Product Private Limited. Page 27 of 27 Copy of the order forwarded to: 1. ACIT, Circle-3, Guwahati. 2. M/s. Assam Air Product Private Limited, M.D. Road, Chandmari, Guwahati-781 003. 3. CIT(A)- Guwahati-2, Guwahati. 4. CIT- 5. CIT(DR), Guwahati Bench, Guwahati. True copy By order Assistant Registrar ITAT, Kolkata Benches Kolkata