TMI Blog2003 (3) TMI 618X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption notification No. 1/95-C.E. dated 4-1-95. Appellants cleared galvanised pipes for Domestic Tariff Area (DTA) without payment of duty. Show cause notice was issued to the appellants asking for duty on the galvanised M.S. pipes cleared for DTA. The adjudicating authority confirmed the demand and imposed the penalty. The appeal filed by the appellants was also dismissed. 3. Heard both sides. 4. The contention of the appellants is that they were only undertaking the process of galvanising, which does not amount to manufacture under Section 2(f) of the Central Excise Act. 5. Appellants were bringing MS pipes and zinc without payment of duty under notification No. 1/95-C.E. As per the provisions of this notification, the specified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not liable to pay any central excise duty. 7. In para 9.9(B) of the Export Import (Exim) Policy, the unit was required to pay applicable duties and taxes on the sale of goods in DTA and permission given by competent authority for such sale was subject to this condition of payment of applicable duties and taxes. The exemption from the payment of customs duty/excise duty to the inputs brought by EOU was for the manufacture and packing of articles used solely for export. 8. The provisions of notification No. 1/95-C.E. provide that specified excisable goods enjoyed exemption from payment of central excise duty only when they were brought in connection with, among others, the manufacture and packaging of articles, or for production or packa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceived MS pipes without payment of central excise duty and on clearance for home market, after galvanisation, they had not paid any excise duty. The effect to this will be that while the pipes cleared for home market directly by the manufacturers of MS pipes will be paying the appropriate central excise duty, but when the same pipes are cleared to the home market, through the EOU, no duty will be payable. Such situation could not be said to be valid in the scheme of EOU and in the notification No. 1/95-C.E.. The appellants received duty-free ungalvanised pipes for export of galvanised pipes and the galvanised pipes were not exported. In such a situation, the appellants are liable to pay duty, which would have been leviable on receipt of pi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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