TaxTMI 
TaxTMI 
2002 (2) TMI 280
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....and cleared the same without payment of duty, inasmuch as the process of galvanization does not amount to manufacture. Vide the impugned Order, the Commissioner has held that the process of galvanization undertaken by M/s. Shakti Steel Pipes amounts to manufacture and both the Units are, in fact, one and the same. Accordingly, he has held that M/s. Shakti Tubes Ltd. should have paid duty on the assessable value of the pipes inclusive of the galvanization cost. Accordingly, he has confirmed the demand of duty of Rs. 67,44,521.22 (Rupees sixty-seven lakh forty-four thousand five hundred and twenty-one and paise twenty-two) against M/s. Shakti Tubes Ltd. along with the imposition of personal penalty of Rs. 8.00 lakhs (Rupees eight lakhs) upon ....
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...., Revenue filed an appeal before the Tribunal who upheld the Order of the Commissioner (Appeals). 5.Shri Chattopadhyay, learned Consultant submits that the present proceedings relate to the show cause notice issued in the year, 1999 raising demand of duty to the extent of Rs. 67.44 lakhs (approx.) against M/s. Shakti Tubes Ltd., on the ground that both the Units are one and the same and M/s. Shakti Tubes should have paid the duty on the final product i.e. Galvanized Pipes, instead of paying the duty on the Black Pipes. He also submits that the above show cause notice which culminated into the impugned Order passed by the Commissioner is solely based upon the fact that the Memorandum & Articles and Balance Sheet of the two Units are the s....
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....of galvanization does not amount to manufacture, is not applicable inasmuch as the said decision was given in the context of the sales tax case and the same is distinguishable. He also draws our attention to the Cross-objection filed by the Commissioner of Central Excise, Patna and submits that the Hon'ble Supreme Court in the case of Sidhartha Tubes Ltd. reported in [2000 (115) E.L.T. 32 (S.C.)] has held that even though a process may not amount to manufacture, still the cost thereof, is includible as the same adds to the intrinsic value of the product to make up the full commercial value which was charged by the appellants, and process of galvanization undertaken in shed and subsequent to payment of duty on MS black pipe is not a ground f....
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....h the sides that said Order of the Tribunal was not appealed against by the Revenue and as such, the same has attained finality. The Commissioner in his impugned Order has observed that certain new facts regarding mutuality of interest in both the Units came to the knowledge of the Revenue. Subsequently and as such, the separate proceedings for the subsequent period were started. However, it is noticed that the show cause notice in the present case, was issued on 15-12-99, whereas the said Order of the Tribunal was passed on 31-8-2000. At the time of passing of the said Order by the Tribunal, no new facts were placed on record. In any case, the said Order was not challenged before the higher appellate forum on the ground that certain new fa....
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....are then galvanizing the same in their own distinct premises with their own resources and selling the same to their ultimate buyers. The transactions between the two companies are at arm's length and on principal to principal basis. As such, the findings of the lower authorities that M/s. Shakti Steel Pipes Ltd. has been created as a dummy Unit, are not borne out of any evidence on record. 9.Another very interesting question has been dealt with by the Commissioner in his impugned Order. The Hon'ble Supreme Court in the case of Gujarat Steel Tubes Ltd. - 1989 (42) E.L.T. 513 (S.C.) categorically held that the process of galvanization does not amount to manufacture. However, by observing that the said decision was given under the provision....