Per Shri V.P. Gulati :

The issue in the appeal relates to the stage at which the goods fabricated by the appellants are to be charged to the duty. The appellants fabricate certain goods and thereafter subject them to the process of galvanisation.

2. The learned lower authority has held that the duty will be chargeable at the stage after galvanisation of same. While the assessee's plea is that the duty would be chargeable after the stage of fabrication, before the galvanisation process is out. The appellants have sought for decision on merits. The appellants before the authorities have pleaded that galvanisation does not amount to manufacture and in their submissions before us have cited the judgement of the Hon'ble Supreme Court in the case of Gujarat Steel Tubes Ltd. Vs. State of Kerala reported in 1989 (42) ELT 513 (SC). The Hon'ble Supreme Court in their judgement has held that by reason of galvanisation no new excisable goods come into existence as the process of galvanisation had not brought in the circumstances a new product, having a different name, character and use.

3. The learned JDR for the department has pleaded that the judgement of the Hon'ble Supreme Court was rendered in the context of sales tax. He has pleaded the ratio of the decision is distinguishable as in the case of Central Excise Levy under definition of the 'manufacture' under section 2f of Central Excise Act, the processes which are ancillary and incidental to the completion of the product are also considered as processes of manufacture. He has pleaded in that view of the matter, the goods which are fabricated by the appellants will have to be charged to duty in the condition in which the same are cleared from the factory.

4. We have considered the pleas made by both the sides. We observe that the appellants fabricates certain parts of structures and have not objected to payment of duty in respect of goods at the stage they get fabricated. However, they further galvanise the same and the revenue has sought to collect the duty as at the stage after galvanisation. The plea of the appellants is that the process of galvanisation does not amount to manufacture and the decision cited before us are that of the Hon'ble Supreme Court reported in 1989 (42) ELT 513 and that of the CEGAT in the case of CCE Vs. Kamani Engineering Corporation Ltd. reported in 1989 (39) ELT 437. The Hon'ble Supreme Court has rendered the decision in the context of sales tax. While the tribunal's decision has been rendered in a case where in the appellant's unit only the process of galvanisation was carried out. The facts in both the cases are distinguishable. In the present case, the goods are first fabricated by the appellant and the same are galvanised before the clearance from the factory. We observe it is settled law that the duty required to be charged in respect of the goods is in the condition in which these are cleared from the factory. Under the Central Excise Law the term 'manufacture' covers also the processes which are ancillary or incidental to the completion of the product. In the present case, the goods fabricated get completed after galvanisation in the hands of the appellants. The Hon'ble Supreme Court in the case of Metal Box reported in 1995 (6) RLT 519 (S.C.)=1995 (75) ELT 449 has held that the duty required to be paid on the goods is in the form as these emerged in the hands of the appellants for clearance from the factory, as the duty has to be paid on the elements which go to enrich the value of the goods.

5. We are therefore of the view the duty is in respect of goods fabricated by the appellants which were galvanised after the fabrication thereof has to be paid at the stage after galvanisation.

6. The appeal is therefore dismissed.