2002 (2) TMI 280 - AT - Central Excise

Summary

Issues:
1. Whether two units are considered as one entity for excise duty purposes.
2. Whether the process of galvanization amounts to manufacture.
3. Applicability of previous tribunal orders and Supreme Court decisions.

Analysis:

Issue 1:
The case involved determining whether M/s. Shakti Tubes Ltd. and M/s. Shakti Steel Pipes should be treated as one entity for excise duty purposes. The Commissioner held that both units are the same, leading to a demand for duty payment and imposition of penalties. However, the Tribunal had previously decided that M/s. Shakti Steel Pipes is an independent unit engaged in galvanization, and the Revenue did not appeal this decision, rendering it final. The Tribunal found that the Revenue could not challenge this final decision based on new facts, and as such, the present proceedings should be dropped.

Issue 2:
Regarding the question of whether galvanization amounts to manufacture, the Commissioner relied on new facts to support his decision. However, the Tribunal disagreed, emphasizing that the process of galvanization does not amount to manufacture based on established legal principles and Supreme Court decisions. The Tribunal found no merit in the Commissioner's interpretation and held that the cost of galvanization should not be included in the cost of black pipes when cleared from M/s. Shakti Tubes Ltd.'s factory.

Issue 3:
The Tribunal also addressed the applicability of previous Supreme Court decisions, distinguishing the case at hand from precedents. While acknowledging the inclusion of galvanization costs in certain cases, the Tribunal clarified that such inclusion was specific to scenarios where galvanization occurred within the same factory of manufacture. Since M/s. Shakti Steel Pipes operated independently for galvanization, the cost of galvanization should not be factored into the cost of black pipes cleared by M/s. Shakti Tubes Ltd.

In conclusion, the Tribunal set aside the Commissioner's order, allowing the appeals and providing consequential reliefs. The Tribunal's decision highlighted the independent nature of M/s. Shakti Steel Pipes, the non-manufacturing status of galvanization, and the inapplicability of certain Supreme Court decisions to the case at hand.