A. P. RAVANI, J. U. MEHTA, J. ( 1 ) THE petitioner has challenged the legality and validity of the orders Annexures G and H passed by the third and fourth respondents respectively and prayed for quashing and setting aside the same. The third and fourth respondents by their orders held that galvanising of strips done be the petitioner is a manufacturing activity under Sec. 2 (f) of the Central Excises and Salt Act 1944 (hereinafter referred to as the Act and therefore liable to excise duty under Tariff Item 26aa (ii ). ( 2 ) ACCORDING to the petitioner the petitioner is a Company who is manufacturer of metallic flexible tubes. The petitioner-Company held a licence in Form L-4 to manufacture the said tubes and has been carrying on the activity of manufacturing metallic flexible tubes and hoses for the last couple of years and has been paying duly regularly on the same. The petitioner requires cold rolled strips of various breadths as raw material for the manufacture of metallic flexible tubes and hoses and therefore they obtain the same either from the open market or directly from the manufacturers of such cold rolled strips. According to the petitioner the cold rolled strips as obtained by the petitioner are duty paid after assessment under sub-item (iii) of Item 26 of the First Schedule to the Act. According to the petitioner the cold rolled strips and patties being iron and steel products are susceptible to oxidation when exposed to the atmosphere. Therefore before such strips or patties used in the manufacture of flexible tubes the petitioner employs on such strips or patties a process of zinc galvanisation to prevent the flexible tubes from oxidation as the zinc galvanisation improves the utility of the material. According to the petitioner the Superintendent of Central Excise after visiting the factory opined that the process of galvanising undertaken by the petitioner. Company was a process of manufacturer and therefore advised by his letter dated 10-6-1977 to take out a licence in Form L-4 for manufacturing iron and steel products viz. galvanised strips falling under Item 26aa of the First Schedule to the Act. The letter is marked Annexure C to the petition. Company was a process of manufacturer and therefore advised by his letter dated 10-6-1977 to take out a licence in Form L-4 for manufacturing iron and steel products viz. galvanised strips falling under Item 26aa of the First Schedule to the Act. The letter is marked Annexure C to the petition. The Company by its letter dated 29-6-1977 addressed to the Assistant Collector explained that the Company was purchasing duty paid strips from open market and after subjecting such strips to galvanisation it manufactured its products viz. metallic flexible tubes which has been cleared on payment of duty a appropriate rates under Tariff Item 68 of the First Schedule to the Act. the letter written by it Company is marked Annexure D to the petition. According to the petitioner thereafter the third respondent visited the factory of the petitioner and opined vide letter dated 18-7-1977 that the petitioner. Company manufactured galvanised strips and that the product was classifiable under Tariff Item 26aa and that therefore the petitioner. Company should take out a licence. According to the petitioner the Company in pursuance of the directions issued by the third respondent applied for and obtained a licence in Form L-4 under protest and reserved their right to appeal. The Company thereafter preferred an appeal to the fourth respondent on 16-9-1977 but the same was dismissed on 26-11-1977 on the ground that no order was passed by the third respondent which was an appealable order and no demand for duty was served on the petitioner and therefore the fourth respondent directed the petitioner to approach the third respondent to obtain an appealable order. The said letter is annexed as Annexure `f to that petition. The petitioner Company thereafter made the provisional assessment from 23 1977 in view of the letter of the third respondent dated 13-11-1977 and the petitioner-Company started giving Bank guarantee of the amount equal to the value of the duty demanded from the petitioner on Galvanisation of the steel strips. The petitioner since taken is giving Bank guarantee at regular intervals. The petitioner Company thereafter made the provisional assessment from 23 1977 in view of the letter of the third respondent dated 13-11-1977 and the petitioner-Company started giving Bank guarantee of the amount equal to the value of the duty demanded from the petitioner on Galvanisation of the steel strips. The petitioner since taken is giving Bank guarantee at regular intervals. Thereafter the third respondent fixed personal hearing on 15-3-1978 in pursuance of the directions given by the Appellate Collector and after appearance of the Company before the third respondents the third respondent passed an order on 30-3-1978 holding that the activity of galvanising of steel strips in the factory of the Company brought into existence a new substance which was entirely a different article having a distinct name character and use and held that the same fell under in Tariff Item 26aa and therefore the petitioner-Company should take out a licence and should pay duty at the appropriate rate. The order of the third respondent is annexed at Annexure `g to the petition. The petitioner-Company therefore filed an appeal before the second respondent on 23-5-1978 reiterating its stand that the process of steel strips galvanisation was rot a process of manufactures under Sec. 2 (f) of the Act and that this process of galvanisation of steel strips cannot be construed to be manufacturing of galvanised strips. However the fourth respondent upheld the order passed by the third respondent and rejected the appeal of the petitioner by his order dated 29-12-1980. The order passed in appeal is annexed at Annexure H to the petition. ( 3 ) BEING aggrieved by the impugned orders Annex. G and H passed by the third and fourth respondents the petitioner-Company has approached this Court for quashing and setting aside the same. ( 4 ) LEARNED Counsel for the petitioner Mr. Gupta submitted that the galvanisation of steel strips is not a process of manufacture as envisaged by Sec. 2 (f) of the Act and that by the said process no new substance or a different article is brought into existence. The learned Counsel submitted that the process of galvanisation merely changed the article which leas already come into existence to a minor consequential change and that the steel strips continued to be steel strips even after galvanisation and that they do not lose their character. The learned Counsel submitted that the process of galvanisation merely changed the article which leas already come into existence to a minor consequential change and that the steel strips continued to be steel strips even after galvanisation and that they do not lose their character. The learned Counsel urged that the steel strips may be known as galvanised steel strips but they continue to he steel strips so as to fall under Item 26aa. The learned Counsel submitted that the Company purchased steel strips which are duty paid under Item 26aa from open market and galvanises them but they still continue to be steel strips. The learned Counsel therefore submitted that galvanisation of steel strips is not a manufacturing process on which excise duty can be levied under Sec. 3 of the Act. It is further submitted by the learned Counsel for the petitioner that galvanising is nothing but coating the iron and steel strips with Zinc by electric process or some other process to prevent it from oxidation. No doubt galvanisation improves the utility of raw material of iron and steel but by the process of galvanisation iron and steel do not lose their essential character as iron and steel. The learned counsel for the petitioner therefore submitted that the orders passed by the third and fourth respondents holding that the galvanisation of steel strip done by the petitioner-Company is a manufacturing process which brings into existence a new product requiring to be manufactured under a licence may be quashed and set aside. ( 5 ) MR. J. D. Ajmera learned counsel for the respondent submitted that galvanisation will be a manufacturing process and that by such process new article is brought into existence by the petitioner-Company and therefore it will be manufacture within the meaning of Sec. 2 of the Act. ( 6 ) ENTRY 26aa of the First Schedule to the Act as it existed at the relevant time reads as follows:26 Iron or Steel Products the following namely: (1) Semi-finished steel including blooms billets Three hundred and fifty slabs sheet bars tin bars and hoe bars rupees pr metric tonne. (i-a)Bars reds coils wires joists girders angles Three hundred and fifty other than settled angles channels other than rupees per metric tonne. slotted channels tees beams. zeds though plates and all other rolled forged or extruded One thousand three hun-shapes and sections not otherwise specified. (i-a)Bars reds coils wires joists girders angles Three hundred and fifty other than settled angles channels other than rupees per metric tonne. slotted channels tees beams. zeds though plates and all other rolled forged or extruded One thousand three hun-shapes and sections not otherwise specified. dred and fifty rupees per metric tonne. (ii) Plates and sheets (including uncoated plates and sheets Intended for tinning and forms such as One thousand three hun- ridges channels other than slotted channels dred and fifty rupees per rain water pipes and their fittings made from metric tonne plates or sheets but not including plates and sheets after tinning) and hoops all sorts other One thousand rupees per than skelp and strips. metric tonne plus the excise duty for the time (iii) Flats skelp and strips. being leviable on pig iron or steel Ingots as the (iv) Pipes and tubes (including blanks therefore) case may be. all sorts whether rolled forged spun cast drawn annealed weided or extruded. Seven hundred and fifty rupees per metric tonne. (v) All other steel castings not otherwise specified ( 7 ) THE learned Counsel for the petitioner has invited our attention to the judgment of the Supreme Court in the case of GUJARAT STEEL TUBES LTD. V. STATE OF KERALA REPORTED IN 1989 (42) ELT 513 (SC): [ 1989 (3) SCC 127 ] wherein the Supreme Court had occasion to consider the question under these Central Sales Tax Act whether galvanisation and corrugation of steel tubes can be termed as manufacture and whether it brings new commodity into existence. therein the petitioner Gujarat Steel Tubes Ltd. contended that the galvanised into pipes manufactured by it are declared goods and are not liable to additional sales-tax as well as surcharge. The Supreme Court in para 5 of the decision has observed as under:the purpose of galvanising a pipe is merely to make it weather-proof. It remains a steel tube. By being put through the process of galvanising it is made rust-proof Neither its structure nor function is altered. As a commercial item it is not different from a steel tube The galvanisation is done on steel tubes or pipes as a protective measure only Merely because the steel tube has been galvanised does not mean that it ceases to be a steel tube. As a commercial item it is not different from a steel tube The galvanisation is done on steel tubes or pipes as a protective measure only Merely because the steel tube has been galvanised does not mean that it ceases to be a steel tube. In para 7 of the said decision it is observed an under:we are of the view that galvanised pipes are steel tubes within the meaning of Sec. 14 (iv) (xi) of the Central Sales Tax Act. The Supreme Court has further hold that the view taken by the High Court that the category of goods called galvanised iron pipes had acquired a different commercial identity as a result of the process of galvanisation and could not be identified with steel tubes was not proper and is erroneous. In the aforesaid case the Supreme Court upheld the contention raised by the petitioner and allowed the appeals. ( 8 ) IN the present case the petitioner-Company purchased duty paid steel strips from the open market and the process of galvanisation was made. By this process the steel strips continue to be steel strips even after galvanisation and they do not lose their character. It may be known as galvanised steel strips but they continue to be steel strips so as to fall under Item 26aa. In these circumstances it cannot be said that the activity carried out by the petitioner was of manufacturing a different item or that it was a process of manufacture under Sec. 2 (f) which brings into existence a new substance or a different article so as to attract Tariff Item 25aa. In our opinion therefore the orders passed by the third and fourth respondents at Annexures G and H are liable to be quashed and set aside. The petition is therefore allowed. By way of interim relief dated 2/04/1981 the petitioner has furnished Bank guarantee for the amount of duty payable by it. The petitioner will be at liberty to discharge the Bank guarantee. If the petitioner has paid any amount of duty to the Department the petitioner will submit an application for the refund of the amount of duty so paid with necessary details on or before 31/01/1990 On submission of the application the Department shall decide the application for refund within a period of two months from the date of submission of the application. The application for refund shall be decided in light of the principles laid down and the observations made in this judgment. ( 9 ) RULE is made absolute accordingly with no order as to costs. (KMV) rule made absolute. .