Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs, New Delhi
New Delhi the 24th June, 2010
Circular No. 927/17/2010-CX
To,
All Chief Commissioners of Central Excise (Including LTU)
All Commissioners of Central Excise (Including LTU)
All Director Generals
Sir/Madam
Subject : Whether process of pickling and oiling would amount to manufacture -
reg
It has been represented to the Board that certain units are undertaking the
process of pickling and oiling in addition to process of de-coiling, cutting and
slitting and whereas by circular No 811/08/2005-CX dated 02.03.2005 it has been
clarified that processes of de-coiling, cutting and slitting do not amount to
manufacture.
- As per ASM Metal Reference Book, Third Edition page 65 “Pickling is removing
surface oxides from metals by chemical or electro chemical reaction” and pickle
means “the chemical removal of surface oxides (scale) and other contaminants
such as dirt from metal by immersion in an aqueous acid solution.” Therefore it
can be said that the process of pickling is only a chemical cleaning process to
remove scales and dirt from the metal by immersion in chemical solution and does
not result in emergence of any new commercially different commodity.
- For a process to amount to manufacture under Section 2f of the Central Excise
Act, 1944, the process undertaken should result in emergence of commodity having
different name, character and use. Since in the present case no new product
emerges as a result of the process of pickling it will not amount to
manufacture.
- The tribunal has in the case of Resistance Alloys [1996 (84) ELT 507 (T)] & Bothra Metal Industries [1998 (99) E.L.T. 120 (Tribunal)] held that the process
of pickling being preparatory process to drawing of wire does not amount to
manufacture.
- Therefore it is clarified that mere undertaking the process of oiling and
pickling as preparatory steps do not amount to manufacture.
- The trade and the field formations may be suitably informed.
- Hindi version will follow.
- Receipt of this Circular may please be acknowledged.
Yours faithfully
(Madan Mohan)
Under Secretary (CX-4)
F. No. 167/17/2010-CX.4