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Namdhari Industrial Traders Versus Commissioner of Central Excise And Service Tax, Ludhiana

2016 (2) TMI 250 - CESTAT NEW DELHI

Duty liability - Manufacturing activity or not - activity of cutting and welding of steel angles - galvanizing steel items - Job work - Held that:- Regarding the demand of duty from the appellant for galvanizing work done by the job worker, the original authority stated that certain processes like cutting welding were done before they are sent to galvanizing. This observation has not been supported by the original authority with source. Further, observation of the original authority that it is t .....

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ant's firm various categories of the items and nature of process undertakes and nature of process undertaken on such items were given. It is necessary for the original authority to examine the processes carried out category wise and to give finding on such process resulted in production of totally a new identifiable and marketable product falling under specific classification in tariff. We find that the original authority has not followed these requirements to arrive at the conclusion of duty li .....

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case are that the appellants are engaged in trading of steel angles, channels, etc. and are also engaged in cutting welding of these steel angles, channels apart from getting these items galvanized by job worker. Based on certain information, the officers of Central Excise Ludhiana conducted investigation relating to non payment of central excise duty by the appellants. The proceedings were initiated against the appellants resulted in order dated 5.5.2011 through which a demand of ₹ 2,07, .....

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these items as per requirement of the buyers. They get these items galvanized, as and when required, by the job worker. The appellants do not have any facility for extensive fabrication of steel structure or for galvanizing steel items. Learned Counsel submitted that the department's case is that all items cleared by the appellants are liable to central excise duty because: (a) cutting and welding resulted in new structural product and (b) galvanizing steel items amounts to manufacture. Lear .....

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product liable to central excise duty. The original authority quoted certain description of the products mentioned in their invoices. These descriptions are as per indent placed by the buyers which are actually products which buyers intends to make out of cutting and wielding products supplied by the appellants. 4. Learned Counsel stated that galvanizing work on steel items were carried out by their job workers. Galvanizing amounts to manufacture but the appellant is not involved in such manufa .....

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ct of each of the items sold. It was found that the argument of the appellant that they cannot be held liable for manufacturing process done by the job worker has strong force and should be examined by the Revenue. The adjudicating authority was directed to examine excisability of the product sold by the appellants by grouping like goods together and giving clear finding whether the process amounts to manufacture and specified duty liability by products of each group. 8. On examination the Impug .....

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d that MS Box, channels fabricated, Joist channels fabricated, galvanized structures etc. Apparently the term fabricated used in the invoice led to the conclusion by the adjudicating authority that there is manufacturing activity. This aspect has not been explained. 9. No enquiry appears to have been conducted from the buyers of these items and on which state these items were cleared by the appellants from their unit. The impugned order did not make any attempt to segregate/ to group various typ .....

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