Pickling and oiling - Not Manufacture?
THE question before the Board is whether Pickling and oiling amounts to manufacture .
"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”, the Board says, “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.
Why this clarification now? Is it to deny CENVAT Credit?
CBEC Circular No. 927/ 17 /2010-CX Dated: 27 June 2010