Customs, Excise and Gold Tribunal - Delhi
Siddhartha Tubes Limited vs Commissioner Of Customs on 16 November, 1999
Equivalent citations: 2001(134)ELT404(TRI-DEL)
ORDER G.R. Sharma, Member (T)
1. The Commissioner (A) in the impugned order held that "The adjudicating officer has correctly rejected their claim for refund as the appellants are obviously not entitled of such a refund. The impugned order, is therefore upheld and the appeal is rejected".
2. The facts of the case in brief are that the appellants manufacture M.S. Pipes and Tubes. M.S. pipe are also called "Black Pipes", manufactured by the appellants are subjected to the process of galvanisation in the same premises. The exemption from the Central Excise duty on M.S. Pipes was withdrawn from 1-3-1994. The contention of the appellants was that since the manufacture of M.S. Pipes is complete prior to its galvanising and since galvanisation does not amount to manufacture within the meaning of Section 2(f), the stock of galvanised pipes as on pre-budget day, i.e. 27-2-1994, had been subjected to the process of galvanisation on or prior to 27-2-1994 which meant that the manufacture of M.S. Pipes and Tubes had been completed and their removal had taken place before the same was subjected to the process of galvanisation. Such removal has been referred to by the appellants as 'deemed removal' of pipes and tubes in terms of explanation to Rules 9 and 49. It was contended by them that since M.S. Pipes and Tubes were exempt from payment of duty prior to 27-2-1994, M.S. Pipes and Tubes contained in the stocks of galvanised pipes as on 27-2-1994 would be exempt from payment of duty as "deemed removal" had already taken place on or before 27-2-1994. The Commissioner (A) observed that M.S. Pipes are removed under the provisions of Section 4(4)(b) is not acceptable as no duty on M.S. Pipes manufactured by them had been paid. The Commissioner (A) also observed that the Asst. Commissioner held that the provision of Rules 9 and 49 would not be applicable in the instant case as M.S. Pipes and Tubes are subjected to the process of galvaisation and the goods removed are galvanised pipes and not M.S. Pipes which would therefore include galvanising charges in the assessable value for the purpose of levy of duty. Accordingly Commissioner (A) held as indicated above.
3. Arguing the appeal, Shri Gopal Prasad, ld. Advocate submits that the M.S. pipes which are called "Black Pipes" by the assessee were exempt prior to 1-3-1994. He submits that these pipes were removed for galvanising and were galvanised on or before 27-2-1994. He submits that during that period the goods were exempt and that in terms of Rules 9 and 49 deemed removals were there. He also submits that the process of galvanisation is not a process of manufacture and since the galvanisation is not the process of manufacture, M.S. Pipes were not dutiable, therefore whatever was in the stock on or before 27-2-1994 should be treated as exempt product and hence the refund claim should have been allowed. He, therefore prays that the appeal may be allowed.
4. Shri Satnam Singh, ld. SDR submits that the Commissioner (A) and the Asst. Commissioner examined the issue on each point raised by the assessee and therefore there was no case for accepting the appeal.
5. Heard the rival submissions. We note that the issues raised by the appellants are fully discussed by the authorities below. The emphasis was that the removal of Black Pipes for galvanisation was deemed removal and that the Black Pipes were not dutiable and that since the galvanisation was not the process of manufacture, duty paid on the stock as on 27-2-1994 should be refunded. We note that the deemed removal under Rules 9 and 49 of the Central Excise Rules, 1944 is only of removal of goods from one part to the other for captive use. In the instant case the removal is confined to removal of black pipes for the purpose of galvanisation. Second point is that the galvanisation is not the process of manufacture and, therefore the tubes remain tubes. In the instant case, we note that the duty is leviable on the manufacture but the payment of duty is deferred to the stage of removal. The Commissioner (A) has rightly held that therefore on the date of removal, the rate of duty applicable is the rate of duty and that the duty has correctly been demanded and that there is no case made out for refund. We, therefore do not see any infirmity in the order passed by the Commissioner (A). In the circumstances, the impugned order is upheld and the appeal is rejected.