Court Holds Hot Dip Galvanisation Process Determination as Fact

The court held that the determination of whether the process of Hot Dip Galvanisation amounts to manufacture or galvanisation under Chapter 73 of the Central Excise Tariff Act 1985 is a question of fact and evidence that cannot be decided in a writ jurisdiction. The court advised the petitioners to address issues related to exemption eligibility under notification no. 214/86-CE through an appeal under Section 35-B of the Act. The court dismissed the writ petition challenging the assessment order passed under Section 11 A of the Central Excise Act 1944 but granted the petitioners the liberty to file an appeal within eight weeks, with a stay on the recovery of the balance amount pending appeal.

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Issues:
1. Whether the process of Hot Dip Galvanisation amounts to manufacture or galvanisation under Chapter 73 of the Central Excise Tariff Act, 1985.
2. Eligibility of the petitioners for exemption under notification no. 214/86-CE dated 25.3.86.
3. Validity of the assessment order passed under Section 11 A of the Central Excise Act 1944.
4. Remedies available to the petitioners against the assessment order.

Analysis:
1. The petitioners were engaged in the process of galvanization of goods under Chapter 73 of the Central Excise Tariff Act 1985. They received a show cause notice contending that the process of Hot Dip Galvanisation of M.S. Fabricated items may amount to manufacture, not galvanisation, and hence excise duty was liable on the final product. The court held that whether the process amounts to galvanisation or manufacture is a question of fact and evidence that cannot be decided in a writ jurisdiction.

2. The show cause notice also raised the issue of the petitioners' eligibility for exemption under notification no. 214/86-CE dated 25.3.86 due to suppliers not paying central excise duty on their final product. The court opined that this issue also requires evidence and cannot be adjudicated in a writ jurisdiction. The petitioners were advised to file an appeal under Section 35-B of the Act to address this issue.

3. During the pendency of the writ petition, an assessment order was passed under Section 11 A of the Central Excise Act 1944. The petitioners sought to quash this assessment order. The court noted that the petitioners have a remedy to appeal against the assessment order under Section 35-B of the Act, which they failed to do within the prescribed time. The court dismissed the writ petition but granted the petitioners the liberty to file an appeal within eight weeks.

4. The court directed the petitioners to deposit a sum of Rs. one crore, which they complied with. The recovery of the balance amount pending the disposal of the appeal was stayed. The court emphasized that if the appeal is filed within the specified period, the appellate authority should not consider the question of limitation and decide the appeal on its merits after hearing all concerned parties.

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