2008 (9) TMI 60 - SC - Central Excise

Clubbing of clearances - Respondent No. 1 is engaged in the manufacture of black pipes which they cleared on payment of duty to sister concern who galvanised the black pipes and cleared the same without payment of duty inasmuch as the process of galvanisation does not amount to manufacture tribunal s decision that both units are separate is a finding of fact hence require no interference moreover revenue has accepted the tribunal s decision is similar case hence appeal dismissed

Summary

Issues:
1. Interpretation of whether two entities are separate units for the purpose of Central Excise Registration.
2. Validity of demand raised on duty payment for galvanized pipes.
3. Authority of the Tribunal's decision and Revenue's subsequent challenge.

Analysis:
1. The case involved a dispute regarding the identity of two entities, M/s. Shakti Tubes Limited and M/s. Shakti Steel Pipes Ltd., under the Central Excises & Salt Act, 1944. The Tribunal, in Appeal Nos. E-782-783/2001, determined that the two entities were distinct units, reversing the Commissioner (Appeals) order. The Revenue challenged this decision under Section 35L(b) of the Act.

2. The respondent No. 1, M/s. Shakti Tubes Limited, manufactured black pipes, which were then passed on to respondent No. 2, M/s. Shakti Steel Pipes Ltd., for galvanization without duty payment. The Revenue issued a show cause notice demanding duty payment for galvanized pipes. The Tribunal, in the impugned order, confirmed the independence of both units, leading to the dismissal of the demand raised by the Revenue.

3. Initially, the Revenue sought to cancel the Central Excise Registration of M/s. Shakti Steel Pipes Ltd. on the basis that both entities were the same. However, the Commissioner (Appeals) and subsequently the Tribunal held them to be separate units. The Supreme Court emphasized the finality of the Tribunal's decision, stating that the Revenue could not challenge it after accepting the earlier ruling. Consequently, the appeals were dismissed, and each party was directed to bear its own costs.