1987 (12) TMI 277 - AT - Central Excise

Summary

Issues involved:
1. Whether galvanization of fabricated articles constitutes a process of manufacture under the Central Excises and Salt Act, 1944.
2. Whether the demand notice issued after the show cause notice was time-barred.
3. Whether galvanization of steel sections results in the products becoming excisable under a specific tariff item.
4. Whether duty on job charges as per a specific notification was appropriately claimed.
5. Whether the goods in dispute were correctly identified and assessed under the Central Excises and Salt Act, 1944.

Detailed Analysis:
1. The judgment addressed the issue of whether galvanization of fabricated articles constitutes a process of manufacture under the Central Excises and Salt Act, 1944. The Collector held that galvanization of fabricated articles is a process of manufacture within the ambit of the Act and is liable to pay duty under a specific tariff item. The Tribunal, however, disagreed with this assessment, stating that galvanization does not change the essential nature of the products and does not render them excisable under the specified item. The Tribunal emphasized that the law dictates excisability based on the final product's nature, not merely the process involved.

2. The time-bar issue was raised concerning the demand notice issued after the show cause notice. The appellant argued that the demand notice was mostly time-barred except for the period falling within six months. The Tribunal noted that there was no allegation of fraud or suppression in the show cause notice, and therefore, the five-year period for issuing the demand notice was not valid. This aspect was crucial in determining the validity of the demand notice and its compliance with statutory timelines.

3. The judgment delved into the question of whether galvanization of steel sections results in the products becoming excisable under a specific tariff item. The department argued that galvanization was essential for the products to be fit for their intended use and cited various judgments in support. However, the Tribunal emphasized that the excisability of products is determined by their final nature and use, not solely by the process they undergo. This analysis was crucial in interpreting the applicability of excise duty based on the manufacturing process involved.

4. The issue of duty on job charges as per a specific notification was also raised in the judgment. The department contended that the appellant had not appropriately claimed duty on the job charges as per a specific notification, and this claim was not raised before the Collector. The Tribunal noted the absence of references to the notification in the show cause notice or the order-in-review, highlighting the importance of complying with notification requirements in duty assessments.

5. The judgment addressed the proper identification and assessment of the goods in dispute under the Central Excises and Salt Act, 1944. There was confusion regarding the nature of the goods, with the Collector initially referring to steel structures and towers, which raised questions about the correct classification for excise duty purposes. The Tribunal clarified that the assessment should be based on the final nature and characteristics of the products, emphasizing the importance of accurate identification for excise duty determination.