TMI Blog2013 (5) TMI 677X X X X Extracts X X X X X X X X Extracts X X X X ..... the factory were in fact the coated pipes given to M/s IOCL. Since the bare pipes had never gone out of the factory and the coating was done within the factory premises, and the goods finally cleared were coated pipes, duty is required to be paid on the coating charges also in the light of decision in the case of Sidhartha Tubes Lt Vs CCE, Indore (2005 (12) TMI 92 - SUPREME COURT OF INDIA). The appellant’s contention that show cause notice is hit by time limit is not acceptable as the activity of coating was done on the bare pipes manufactured by the appellants themselves was never brought to the notice of the department. Moreover, the fact that figures of coating pipes shown in the excise records were not in respect of the bare pipes received from outside for coating was never brought to the notice of the department. This is also seen from fact of entering two separate contracts with M/s IOCL on the same date was also not brought to the notice of the department. This action shows that this was a deliberate attempt to evade duty on the coating charges. Thus the extended period is rightly invokable in this case. Against assessee. - E/2492/2006 - 55851/2013-EX(PB) - Dated:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, it was found that the rented land of CWC was also within the factory premises of registered factory of the appellant. The Department therefore, felt that the bare pipes had never left the factory and the pipes which were cleared from the factory were CTE Coated pipes which were given to M/s IOCL. The duty on the bare pipes was paid by the appellant without shifting the bare pipes from the factory premises and the fact that bare pipes had never left the factory and it was only after CTE coating pipes were cleared from the factory was suppressed by the appellant from the department. Accordingly a show cause notice was issued to the appellants demanding duty of Rs. 1,49,13,861/- payable on the coating charges of Rs. 9,32,11,630/- along with interest and also proposing imposition of penalty on the appellant under Rule 25 of the Central Excise Rules read with Section 11AC of the Central Excise Act, 1944. The show cause notice was contested by the appellant and Commissioner has adjudicated and confirmed the duty of Rs. 1,28,56,776/- under Section 11A of Central Excise Act and also demanded the interest under Section 11AB of the Central Excise Act and imposed mandatory penalty eq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leared the same to M/s IOCL under cover of invoices of coating charges without payment of Central Excise duty leviable thereon. As the activity of coating does not amount to manufacture, the duty is not required to be paid on activity of coating of pipes received from outside. The appellant had never disclosed the fact that the coated pipes shown in the Excise Returns were made out of bare pipes manufactured by them only. The fact of entering into the separate contract with M/s IOCL was also not brought to the notice of the department. Since the invoices are also not submitted, the department could not ascertain the full fact. He submitted that the appellant had evaded the duty on the coating charges and accordingly they are liable to pay the duty, interest and penalty. 7. After hearing both the sides, we find that the appellant s contention is that the coating work was done on already cleared and duty paid bare pipes and since the said activity of coating does not amount to manufacture, they are not supposed to pay any duty on the value of coating charges. On the other hand, the Revenue claims that actually CTE pipes were cleared to Indian Oil Corporation and the bare pipes were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... records of the security office situated near the gate of the factory premises. Shri M. Mantri had categorically stated before the panches that security office does not keep any record of movement of such goods to the coating plant for coating as these movements were within the factory premises. 9. We also note that in the invoices of bare pipes, no details of transport are shown which means the goods did not move outside the factory premises. On the other hand, the goods which were cleared from the factory were coated pipes and in the invoices issued by the appellant for coated pipes, transport vehicle numbers were clearly mentioned. From these observations, we are of the view that bare pipes have never gone out of the factory premises and appellant merely shifted pipes from SW Division to SPEC Division for the purpose of coating and the goods which were removed outside the factory were in fact the coated pipes given to M/s IOCL. 10. The appellant s contention is that since the coating does not amount to manufacture, there is no reason to demand duty on the coating charges as they have already paid the duty on the bare pipes, we find that since the bare pipes had never gone out ..... X X X X Extracts X X X X X X X X Extracts X X X X
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