2017 (6) TMI 319 - AT - Central Excise

Manufacture - activity of manufacturing Steel Tubular Poles - demand has been confirmed against the appellant holding that the process undertaken by the appellant does not amount to manufacture relying on the decision of the Hon ble Apex Court in the case of Hindustan Poles Corporation 2006 (3) TMI 2 - SUPREME COURT , where it was held that the activity of the appellants of merely joining of three pipes, one with other, of different dimensions to obtain a desired length can by no stretch of imagination be brought within the category of manufacture - whether the activity undertaken by the appellant is same as in the case of M/s Hindustan Poles Corporation or not? - Held that - the process undertaken by the appellant is not the same process in the case of the M/s Hindustan Poles Corporation Wherein, the process is only joining of three different length of pipes but in the case in hand, the dia-meter of the pipes are different and the same has been joined by the process of swaging. Moreover, the pipes were welded with the base plate to make it pole and on the top on the pole a cap is fixed. As the process undertaken by the appellant altogether different from the process undertaken by the M/s Hindustan Poles Corporation - In that circumstance, the decision of the M/s Hindustan Poles Corporation cannot be relied on in the facts and circumstances of the case, therefore, the activity undertaken by the appellant results in a new distinct product with distinct identifiable product - the appellant has correctly availed the benefit of exemption N/N. 56/2002 - appeal allowed - decided in favor of appellant.

Summary

Issues:
Whether the activity undertaken by the appellant amounts to manufacture as per the Central Excise Act, 1944?

Analysis:
The appellant, engaged in manufacturing Steel Tubular Poles, appealed against a decision denying them the benefit of exemption due to the activity not being considered as manufacturing. The Revenue argued that the process of joining pipes, welding, and painting did not constitute manufacturing. The appellant contended that their process resulted in a new product, citing a Supreme Court decision supporting their claim. The core issue was whether the appellant's activity matched the process in a previous case used as a precedent.

The Tribunal examined the process in question and compared it to the precedent case. The Supreme Court's decision in the precedent case emphasized that the activity of merely joining pipes without altering their basic identity did not constitute manufacturing. However, the Tribunal noted significant differences in the appellant's process, involving different pipe diameters, swaging, welding with a base plate, and capping, resulting in a distinct product. As the process led to a new identifiable product, the Tribunal held that it amounted to manufacturing, allowing the appellant to avail the exemption.

In conclusion, the Tribunal set aside the previous order and granted the appellant relief, emphasizing that the appellant's process resulted in a new product with a distinct identity, meeting the criteria for manufacturing under the Central Excise Act, 1944.