TaxTMI 
TaxTMI 
2005 (12) TMI 92
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....ed pipes. In these civil appeals, we are concerned with the period May 1994 to July 1996. 2.Appellant was engaged inter alia in the manufacture of m.s. galvanized pipes. These pipes were made from H.R. coils. The pipes emerging on hydro testing stage were pickled in acid, washed in running water and galvanized by dipping in molten zinc. 3.The appellant filed its classification list claiming that "galvanization" did not amount to manufacture. The appellant claimed that m.s. galvanized pipes were non-excisable goods, as the said pipes had been processed out of duty paid m.s. pipes manufactured in its factory. A show cause notice was issued by the department stating that the appellant had cleared m.s. pipes without adding the cost of gal....
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....e manufacture of m.s. pipes and tubes. He further pointed out that the assessee had two sections in its factory, one named as tube mill section, in which the assessee manufactured m.s. pipes and tubes. For manufactured m.s. pipes and tubes, steel coils, strips and slits of required thickness were purchased from the market by the assessee. These items were then rolled in, welded and cut to required lengths and to ensure smoothness, grinding was carried out throughout the lengths of the pipes. The edges of the pipes were subjected to the process of elimination of uneven edges. The pipes were then subjected to hydro testing and threading. Learned Counsel submitted that at this stage, the manufacture of pipes got completed and they became marke....
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....he tariff description contained in sub-heading 7306.90 also stood answered and levy got attracted at that stage alone under Section 3 of the said Act. That, in any event, even assuming for the sake of argument that the process of galvanization amounted to manufacture on the facts of this case, galvanization as a process took place after completion of m.s. pipes and, therefore, the cost of galvanization was not includible in the assessable value. 5.Shri G.E. Vahanvati, learned Solicitor General submitted on behalf of the department that the question involved in these appeals related to assessment of duty under Section 4 of the Act and not on the excisability of the goods. He submitted that the concept of "valuation" was different from the....
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....cesses (including galvanization) then such a process gave value addition to the product and consequently, the cost of galvanization had to be included in the assessable value. Galvanization added to the quality. Galvanization increased the value of pipes. It enriched the value of goods and, therefore, the cost incurred by the assessee for galvanization was required to be included in the assessable value. 7.At the outset, we may state that value is the function of price under Section 4(4)(d)(i) of the Act. The concept of "valuation" is different from the concept of "manufacture". Under Section 3 of the Act, the levy is on the manufacture of the goods. However, the measure of the levy is the normal price, as defined under Section 4(1)(a) o....
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....ise Law. The levy of excise duty is on the "manufacture" of goods. The excisable event is the manufacture. The levy is on the manufacture. The measure or the yardstick for computing the levy is the "normal price" under Section 4(1)(a) of the Act. The concept of "excisability" is different from the concept of "valuation". In the present case, as stated above, we are concerned with valuation and not with excisability. In the present case, there is no dispute that AMS came under sub-heading 3402.90 of the Tariff. There is no dispute in the present case that AMS was dutiable under Section 3 of the Act. In the case of Union of India & Others etc. v. Bombay Tyre International Ltd. etc. reported in AIR 1984 SC 420, this Court observed that the mea....