Customs, Excise and Gold Tribunal - Delhi
Collector Of Central Excise vs Kamani Engg. Corpn. Ltd. on 22 April, 1988
Equivalent citations: 1989(23)ECR495(TRI.-DELHI), 1989(39)ELT437(TRI-DEL)
ORDER K.L. Rekhi, Member (T)
1. proceedings initiated by the Government of India revision show cause notice dated 2.3.1982 aforesaid have, on transfer of the proceedings to this Tribunal, been taken up as if it were an appeal filed by the department.
2. We have heard both sides and have carefully considered the matter. The facts, in brief, are that the respondents undertook the work of galvanisation of different types of steel structural materials received from different parties on job charge basis. The Superintendent of Central Excise held, by his order dated 4.2.1980, that the process of galvanisation resulted in different characteristics and hence constituted manufacture so as to attract fresh levy of duty under Item 68 of the Central Excise Tariff. In appeal, the Appellate Collector, by his order dated 13.8.1981, held that the process of galvanisation of iron and steel structural received on job basis did not amount to manufacture as defined in Section 2(f) of the Central Excises and Salt Act, 1944. The Central Government, which examined the records of the case, was tentatively of the view that the process of galvanisation involved a series of operations and the final product had an "improved utility, character and longer life than the original product" and hence the process of galvanisation constituted a process of manufacture within the meaning of Section 2(f) ibid and the end product which went with the adjective 'galvanised' could also be distinguished from the pre-galvanised material for purposes of marketability. Thereupon, the Central Government issued the subject revision show cause notice under the then Section 36 of the Act.
3. The respondents resist the show cause notice on merits as well as on the ground of limitation. On merits, they reiterate the finding of the Appellate Collector and cite in their support -
(1) 1972 (32) STC 322 (Andhra Pradesh) - The State ofAndhra Pradesh Sub-sec Sri Durga Hardware Stores and Another. (2) 1987 (28) ELT 352 (Tribunal) - Collector of Central Excise, Baroda Sub-sec Dod-sal Private Ltd.
In both the above judgments it has been held that the process of galvanisation did not bring into existence a new and different product and that it was only a process of coating. Regarding the time bar, the respondents rely on -
(1) 1981 ELT 421 Delhi -Associated Cement Companies Ltd. Sub-sec U.O.I. (2) 1987 (27) ELT 202 (Tribunal) - Collector of Central Excise, New Delhi Fedders Lloyd Corporation Private Ltd. (3) 1987 (29) ELT 957 (Tribunal) - Collector of Central Excise, Bombay v. R.M.D.C. Press (P) Ltd.
The respondents argue that since the revision show cause notice was issued on 2.3.1982 against the order-in-appeal dated 13.8.1981, the show cause notice was outside the time limit of six months as laid down in the third proviso to Section 36 of the Act.
4. The learned representative of the department reiterates the reasoning given in the revision show cause notice and contends that the show cause notice was not time barred because it related to classification dispute only and hence the time limit of one year as laid down in the second proviso to Section 36 was applicable.
5. On careful consideration, we agree with the respondents on the substantive point that the process of galvanisation did not bring into existence any new product having a distinct name, character and use. The material before galvanisation was steel structural and it remained a steel structural only even after galvanisation. It was put to the same use also. What the galvanisation did was to provide a coating with molten zinc metal so as to protect the steel structural from rusting. The life of the steel structural was, thereby, prolonged. The learned representative of the department relies on the ratio of the Supreme Court judgment in the case of Empire Industries Ltd. -1985 (20) E.L.T. 179 (SC). This judgment related to cotton fabrics and there was a finding by the Hon'ble Supreme Court that the processes of bleaching, dyeing and printing brought into existence a new product. But in the case before us, the product remains the same, namely, steel structural and it is put to the same use also. The process of galvanisation, no doubt, improved the quality and prolonged the life of the structural but it did not thereby bring into existence a new product having a different name, character and use. We, therefore, uphold the finding of the Appellate Collector that the process of galvanisation did not amount to manufacture and hence there could be no further duty under Item 68.
6. Since we have agreed with the respondents on the substantive issue of merit, there is no need for us to go into the question of limitation.
7. In the result, we discharge the revision show cause notice and dismiss this appeal.