Custom, Excise & Service Tax Tribunal
M/S. North Eastern Tubes Ltd vs Commr. Of Central Excise & Service Tax on 9 April, 2012
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
EAST REGIONAL BENCH : KOLKATA
Stay Application No. 803/10
IN
Excise Appeal No.-673/2010
(Arising out of the Order in original No. 01/Commr./CE/GHY/2010 dated-16.07.2010 passed by the Commissioner of Central Excise & Service Tax, Guwahati)
SRI S.K. GAULE, HONBLE TECHNICAL MEMBER
DR.D.M. MISRA, HONBLE JUDICIAL MEMBER
M/s. North Eastern Tubes Ltd.
APPELLANT(S)
VERSUS
Commr. of Central Excise & Service Tax,
Guwahati
RESPONDENT(S)
APPEARANCE Sri B.N. Chattopadhyay, Consultant FOR APPELLANTS Sri B.B. Agarwal, Commr. (A.R.) FOR THE RESPONDENTS CORAM:
SRI S.K. GAULE, HONBLE TECHNICAL MEMBER DR.D.M. MISRA, HONBLE JUDICIAL MEMBER DATE OF HEARING :19/3/2012 DATE OF PRONOUNCEMENT:
ORDER NO. Per DR. D.M. MISRA This is an application for waiver of pre deposit of Cenvat credit of Rs.59,54,585/- , Education Cess of Rs.1,22,207/- and Secondary & Higher Education Cess amounting to Rs.35,960/- and penalty of Rs.2,85,57,378/- imposed under Section 11AC of the Central Excise Act, 1944.
2. Briefly stated facts of the case are that the appellants are engaged in the fabrication of Steel Tubular Poles. The process carried out used by them comprise of cutting MS black pipes according to the required length, swaging of the pipes, the pipes of different diameters are then welded and then painting of the same in the steel tube section.
3. It is the case of the Revenue that such processes do not involve manufacture within the meaning of Section 2 (f) of the Central Excise Act, 1944 and hence the CENVAT credit availed by the applicant on inputs and the refund availed under Notification No. 32 of 99-CE dated 8/7/99 are irregular and accordingly show cause cum demand notice was issued to them for recovery of the same. Ld. Adjudicating authority confirmed the demand and imposed penalty observing that the process carried out by the applicant is not a process of manufacture within the meaning of Section 2(f) of the Central Excise Act.
4. The Ld. Consultant appearing for the applicant submitted that they were carrying out the process of swaging as well as process of welding of the pipes. It is his submission that the process of swaging has been considered by the Honble Apex Court in the case of Prachi Industries Vs. Commr. of Central Excise, Chandigarh reported in 2008 (225) E.L.T. 16 (S.C.) wherein their Lordships held that the process of swaging is a process of manufacture within the definition of Section 2(f) of the Central Excise Act. He has submitted that the judgment of the Honble Apex Court in the case of Hindustan Poles Corporation Vs. Commr. of Central Excise, Calcutta reported in 2006 (196) E.L.T. 400 (S.C.) relates to the fact of joining of three pipes of different diameters to obtain the desired length by the process of welding only. This judgment has been considered by the Honble Supreme Court in Prachi Industries case (supra) and distinguished. It is his submission that in the present case the manufacturer of tubular poles by employing the process of swaging as well as the process of welding of different pipes amount to manufacture as defined under section 2 (f) of the Central Excise Act, 1944.
5. Per contra, the Ld. A.R. (Commissioner) has reiterated the findings of the adjudicating authority. He has submitted that so far as processes employed by the applicant, it does not result into a distinct commodity having a distinct character and use. The pipes remained pipes even after employing the various processes by the applicant. Hence, the processes employed by the applicant cannot be treated as a process of manufacture and hence the benefit of CENVAT credit and other benefits availed by them are not admissible to them.
6. Heard both sides and perused the records. There is no dispute that MS black pipes manufactured by the applicant in their own factory are first subjected to the process of swaging and later welded to make the desired length of the pipes. The Honble Supreme court in Prachi Industries case (supra) have held that the process of swaging of pipes result into manufacture of poles/pipes and their Lordships in the said judgment distinguished the ratio of Hindustan Poles case (supra). The facts in Hindusthan Poles case related to mere joining of pipes by the process of welding only and no swaging of pipes was involved. We find that prima facie by applying the ratio of the judgment of Honble Apex Court in Prachi Industries case (supra), the processes of swaging and welding carried out by the applicant result into manufacture of tubular poles and pipes of different sizes within Section 2 (f) of CEA, 1944. The applicant thus made out a prima facie case for total waiver of pre deposit of duty and penalty, accordingly, the pre deposit of duty and penalty are waived and recovery thereof are stayed during the pendency of the appeal. Stay Petition allowed.
( Pronounced in the Court on 26/04/2012 )
Sd/- 26/4/12 Sd/- 26/4/12
(S.K. GAULE) (D.M. MISRA)
TECHNICAL MEMBER JUDICIAL MEMBER
k.b/-
Excise Appeal No.-673/2010
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