Excise duty on galvanised pipes turns on removal date, and galvanisation does not create deemed removal for refund claims.

Removal of black pipes for galvanisation was not treated as deemed removal under Rules 9 and 49 of the Central Excise Rules, 1944, because those provisions apply to movement of goods for captive use rather than to such processing. Excise duty is attracted at manufacture but becomes payable on removal, so liability was determined by the rate in force on the date the galvanised pipes were removed. The fact that galvanisation itself was not manufacture did not make the stock exempt on the relevant date. The refund claim was therefore not maintainable and the duty demand was upheld.

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Issues: Whether the assessee was entitled to refund on the footing that removal of black pipes for galvanisation amounted to deemed removal and that galvanisation was not manufacture, so the goods should be treated as exempt as on the relevant date.

Analysis: The authorities held that deemed removal under Rules 9 and 49 of the Central Excise Rules, 1944 applies to movement of goods for captive use and not to removal of black pipes for galvanisation. The duty is attracted on manufacture, but its payment is deferred to the stage of removal. Since the goods removed were galvanised pipes and the rate of duty applicable on the date of removal governed liability, the stock could not be treated as exempt merely because galvanisation itself was not manufacture.

Conclusion: The refund claim was not maintainable and the duty demand was correctly upheld.

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