2007 (12) TMI 56 - AT - Central Excise

Whether the activity of bending of pipes on job work basis would amount to manufacture or not - held that conversion of pipe into pipe fittings does not involve any manufacture inasmuch as it is only a change of physical shape and size, adopted and modified for the purpose of specific uses - basic issue of manufacture stands decided in favour of the appellant - By following the same and without going to the other aspects, we set aside the impugned order and allow the appeal

Summary

Issues:
Whether bending of pipes on job work basis amounts to manufacture.

Analysis:
The central issue in the present appeal revolves around determining whether the activity of bending pipes on a job work basis constitutes manufacturing. The appellant's process involves several steps, including clamping, adjusting the radius of bend, heating, bending, testing, and protecting the bend ends. The appellant argues that bending pipes does not amount to manufacturing as there is no fundamental difference between straight and bent pipes. The appellant emphasizes that bended pipes are tailor-made and vary in specifications, indicating no new product with distinct characteristics emerges from the process. Additionally, the appellant challenges the Commissioner's order on the grounds of limitation, asserting that only a portion of the demand falls within the limitation period.

Furthermore, the appellant highlights previous Tribunal decisions supporting the stance that bending pipes does not constitute manufacturing. The appellant points out that post-2004, activities not classified as manufacturing fall under the purview of business ancillary services, subject to service tax. The appellant's registration with the Service Tax Department from December 2004 onwards, as a service tax payer for the activities in question, further supports the argument that bending pipes does not attract excise duty. Reference is made to a judgment by the Hon'ble High Court of Madras, which held that bended pipes are still categorized as pipes, reinforcing the notion that the process does not result in a new identifiable product.

The Tribunal's decision in the case of M/s. Dodsal Pvt. Ltd. v. C.C.E., Bangalore is cited, where it was held that modifying pipes for specific project requirements does not amount to manufacturing. The Tribunal's reasoning, supported by previous case law, emphasizes that merely changing the physical shape and size of pipes for specific uses does not meet the criteria for manufacturing under the Central Excise law. The judgment underscores that converting pipes into fittings, such as elbows and reducers, does not constitute manufacturing, as affirmed by the Hon'ble Supreme Court in previous cases.

Ultimately, the Tribunal, following precedent and considering the arguments presented, rules in favor of the appellant, setting aside the impugned order and allowing the appeal. The decision is based on the determination that bending pipes on a job work basis does not amount to manufacturing, aligning with established legal interpretations and precedents in similar cases.