BALIA, J. - (1.) HEARD learned counsel for the parties.
(2.) THE petitioner has been licensed to carry on business of filling and selling liquefied Petroleum Gas (LPG) as a parallel marketeer as per Sec. 2 of the Liquefied Petroleum Gas (Regulation of Supply & Distribution) Order, 1993 (herein after the `order of 1993' ). THE activities of petitioner consisted of purchasing in bulk the liquefied petroleum gas from the bulk manufacturer of liquefied petroleum gas, in the present case Hindustan Petroleum Ltd. and packing the LPG in marketable cylinders and to sell it to end users of the gas. The petitioner having installed units for carrying out process of filling the gas cylinders, to be marketed for use by the buyers, after being registered as a small scale industry with the Industries Department of the State of Rajasthan, commenced his gas bottling plant somewhere in 1994 and made an application on 26. 09. 1995, for obtaining eligibility certificate to secure exemption from payment of sales-tax under the Rajasthan Sales-tax Incentive Scheme for Industries, 1987. On 13. 10. 1995, petitioner was communicated by the General Manager, District Level Screening Committee, Pali that his application has been rejected by the Committee, observing it to be an `ineligible industry' as per item 19 of Annx. B attached with the said Incentive Scheme of 1987. The petitioner made a representation to respondent No. 2 for reconsidering his application by pointing out that rejection of his application with reference to item No. 19 of Annx. B was erroneous, in pursuance of which petitioner was required to have discussion with the authority concerned vide communication dated 9. 04. 1996 (Annx. 4) and ultimately, by communication dated 13. 11. 1996, petitioner was informed that its application for grant of `eligibility certificate' for exemption from payment of sales tax has been rejected vide Annx. 5. Aggrieved with that rejection, petitioner preferred an Original Application before the Rajasthan Taxation Tribunal, Jodhpur, then exercising jurisdiction in that regard. The Taxation Tribunal vide its impugned order dated 29. 07. 1998, held that though item No. 19 of Annx. B does not apply to case of the petitioner inasmuch as said item is confined to distilling, storing, bottling, blending or brewing of potable liquor/alcohol and, does not extent to other commodities. However, it found that though transfer from bulk form to cylinder might entail process involving mixture of air and liquefied petroleum gas and it is transferred under pressure and require installation of specific equipments but it remains that what is bought is liquefied petroleum gas and what is sold is liquefied petroleum gas, therefore, no commercially distinct and different commodity comes into existence and therefore, the process does not involve manufacturing and, in effect, the petitioner company does nothing but repacks the goods. As such, the petitioner company is not entitled to benefits under the Incentive Scheme, firstly, because it is not engaged in manufacturing activity and secondly, because repacking of material is included in `ineligibility list' in item No. 6 of the Annx. B appended to Incentive Scheme. In coming to this conclusion, Tribunal relied upon decision of Gujarat High Court in State of Gujarat vs. Kosan Gas Company (1 ). Aggrieved with the aforesaid order, petitioner is before this Court. It has been contended by learned counsel for the petitioner that the Tribunal has apparently erred in not appreciating that the contention of the assessee-petitioner from the beginning has been that bulk liquefied petroleum gas, as coming out from manufacturer, itself can not be used by the consumer in that form nor it can be packed without undergoing technically manufacturing process. It becomes usable for consumer use only after passing through certain manufacturing process with adherence of various safety measures. It was pointed out by the learned counsel that unless the liquefied petroleum gas in cylinder is filled by mixing of air, the liquefied gas as such can not be used by the consumer as fuel gas. It is air in the cylinder that reacts with the liquefied gas on being put under pressure. The Cylinder, by opening the valve, emits the liquefied petroleum gas mixed with air, in gas form and not in liquid form, that makes it a usable fuel. It is this commodity, which is known as commercially marketable commodity by the common buyer and not the bulk liquefied petroleum gas, stored in large tankers or underground tanks, to be packed by mechanised process, by admixturing with air under pressure, in preparing to make it usable. Thus, the manufacturing process of liquefied petroleum gas, so far as its marketability is concerned, is complete only after it is so filled in equipments like LPG cylinders, fitted with safety valve and sealed with, along with regulators to enable the consumer to use said LPG and is a commercially distinct LPG than LPG stored in bulk. The petitioner is, therefore, not engaged in mere activity of repacking of bulk LPG into small quantity of LPG, from large store house to smaller containers but packing is essential part of making it usable for buyers by transferring LPG from bulk storage to specified containers by use of mechanised process under air compressure, mixing with proper proportion of air.
(3.) IF that be so, it not only becomes a manufacturing process within definition of `manufacture' under the Rajasthan Sales-tax Act, 1954. under which said Incentive Scheme has been promulgated, it can not be considered to be a case of `re- packing' because it is a case of bringing the LPG gas for the first time in marketable form. Mr. Johari, learned counsel for the Revenue, on the other hand, contended that no manufacturing process is involved in filling of LPG gas in small containers from large container but is merely a part of distributory system of the end product, manufactured by the petroleum companies and merely because instead of Company itself marketing in small quantity, marketing of small quantity has been left to marketeer by repacking smaller quantity of LPG supplied to them in different variable filling equipments. Therefore, the Tribunal was right in its conclusion that the process employed by the petitioner Company is neither a manufacturing process and, even if it is a manufacturing process, it is merely a repacking of the commodity (LPG) from large container to smaller containers. A contention was also raised by Mr. Johari that claim of the assessee being claim of concession under the Scheme, the provisions of the Scheme must be strictly construed, by diverting any benefit of doubt in such construction of Scheme to the Revenue and therefore, even if there is some ambiguity, it should be resolved in favour of Revenue and against the concession. For this proposition, learned counsel relied upon a decision of this Court in Aditya Cement's case (121 STC 113) ;