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TMI Blog2023 (7) TMI 1427X X X X Extracts X X X X X X X X Extracts X X X X ..... and the said activity does not amount to manufacture. As per the impugned order, the proceedings were initiated based on the findings of the Tribunal in the case of MAHINDRA MAHINDRA LTD. VERSUS COMMISSIONER OF C. EX., AURANGABAD [ 2005 (7) TMI 396 - CESTAT, NEW DELHI ] . However thereafter, Hon ble High Courts as well as Hon ble Supreme court upheld that cutting, drilling galvanization of angles channels does not amount to manufacture. Subsequent Larger Bench of the Hon ble Tribunal has held cutting, drilling galvanization of angles channels for use in structures is not excisable to duty. The finding in the impugned orders are unsustainable - Appeal allowed. - MR. P.A. AUGUSTIAN, MEMBER (JUDICIAL) AND MR. PULLELA NAGESWARA RAO, MEMBER (TECHNICAL) Shri Anil Kumar B, Advocate for the Appellant Shri K.A. Jathin, Authorised Representative for the Respondent ORDER The issue in the present appeal is regarding classification of goods whether they fall under Chapter 7216 or 7308 of the Central Excise Tariff Act, 1985. The appellant is engaged in buying angles, channels, and flats of mild steel and selling the same to the Kerala State Electricity Board (hereinafter referred as KSEB) aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion are nothing but pieces of Angles and Channels covered by Chapter Heading 7216 and the activity of cutting, drilling holes does not amount to manufacture. He further submitted that the process of galvanization of these cross arms and clamps will not amount to manufacture, since there is no new and different article emerged. Further he submits that the Central Government vide Finance Act, 2011 has introduced a Chapter note 5 to Chapter 72 of Central Excise Tariff Act, 1985 whereby they deemed the process of galvanization of items under Chapter 72 of Central Excise Act, 1985 to be manufacture and there was no clearance of such goods after the insertion of Chapter 72 to demand Excise duty from the appellant. Learned counsel further submits that the activity of galvanization is covered as a taxable service under the category of Business Auxiliary Services under Section 65(19) of the Finance Act, 1994. As this activity is of processing of goods for, or on behalf of, the clients, the appellant have been accordingly paying the service tax on the services rendered by them to KSEB on the galvanization activity undertaken by them on job work basis. For such activity, appellant obtaine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpugned order, appellant is eligible to discharge duty liability as per the law by utilizing CENVAT credit on raw material for the substantial portion of the demand covered by the impugned order. More over appellant also paid service tax on the same activity on which the present demand of central excise duty is confirmed. 5. Regarding the activity carried out by the appellants, they were dully registered with the jurisdictional Central Excise Authority right from 01.08.1979. Since the issue was not settled, the appellant was paying Central Excise duty in respect of the aforesaid activities and thereafter, when the issue was judiciously settled to the effect that the activities carried out by the appellant would not amount to manufacture and nor classifiable under Chapter Heading No.7308.90 of 1st schedule to Central Excise Tariff Act, 1985 the appellant stopped paying Central Excise duty. Upon non-payment of Central Excise duty, proceedings were initiated vide Order-in-Original dated 147/98 dated 27.10.1998. Considering the submissions made by the appellant and also considering the issue being settled by the higher forums, the Assistant Commissioner of Central Excise categorically ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame issue as to whether the activity of the appellant of producing transformed structures from MS Rods, MS Channels etc. amounts to manufacture. The Tribunal held, based on the affirmation its earlier decision in the case of Commissioner vs.Tamil Nadu Electricity Board reported in 1996 (82) E.L.T. A158 (S.C.) by the Hon'ble Supreme Court vide order dated 31/07/2015. On appeal against the Tribunal's order the Hon'ble Supreme Court relied on their decision in the case of Servo-Med Industries Ltd. vs. CCE, Mumbai reported in 2015 (319) E.L.T. 578 (S.C.) and held that there is no activity of manufacture attracting excise liability. 7. Apart from the legal position on binding nature of the decision of the Hon'ble Supreme Court that too in the appellant's own case on same set of facts, I also note that thereliance placed by the Revenue on the decision of Hon'ble Supreme Court in Man Structurals Ltd. (supra) is not appropriate. In the said case, the Hon'ble Supreme Court after detailed examination, categorised the various case laws on the subject of manufacture into four groups. The matter was remanded back to the Tribunal for decision afresh. It is clear that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are tailor made for use on electric poles and fall under subheading 7308. The appellant is galvanising the goods falling under 7308 which amounts to manufacture as per Chapter Note to Chapter 73 of the Central Excise Tariff w.e.f 01.03.2002. 11. Learned AR also draws our attention to the dispute regarding the previous period and submitted that the assessee had classified the said goods under Chapter 7308.90 and claimed that goods are not dutiable. It is also seen that the assessee was a Central Excise registrant and in the classification list bearing Sl.No.1/98-99 filed by the party effective from 01.04.1998 they have classified Cross Arms and Earth Pipes under CH 7308.90 as they had been doing earlier but had claimed the same as not dutiable. In their reply to the said SCN too, the party had never disputed classification of the item under 7308.90 but had contended that the processes involved were only cutting, drilling, galvanization etc., which does not amount to manufacture. Thus the short question that came for consideration before the Assistant Commissioner was whether the said processes amount to manufacture and whether the said final products are excisable. The Assistant Com ..... 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