Is This A Code Violation

If the lug is temporary, no. If permanent, it needs to be tested for 2.5 (I think) x the design load on the lug. If it is a violation, the inspector should pick it up during inspection. The lug needs to be installed to suit the load and the direction of the load.

Why not skip the welding and simply rig it via a shackle through a bolt hole?

Thank you all for your opinions!

I do agree that the idea behind the welding a lifting on a fitting is okay when the proper welding procedures are used and there are adequate integrity in the fitting to support its weight during lifting procedures.

But What about the modifying of the fittings. e.g. trimming 45 deg elbows to suit pipes and welding two tees to form a four way fitting, I believe that both practices are fairly common in industries? But if one were to cut and change the fittings, that will have changed the initial design intent, and the integrity of the modified fittings are unknown unless detailed analysis are performed. But does the code address this issue by prohibiting the modifications of any fittings?