Customs, Excise and Gold Tribunal - Mumbai
Sudhir Engineering Company vs Cce on 6 May, 2005
ORDER Archana Wadhwa, Member (J)
1. The brief facts of the case are as under:
2. The appellants are engaged in the manufacture of Diesel Generating Sets classifiable under Chapter No. 85 of the Central Excise Tariff Act, 1985. The appellant's factory was visited by the Preventive Officers of Central Excise, on 28.1.1991, who conducted various checks and verifications and recorded the statements of the authorized representatives of the appellants. During the course of checks, it transpired that the appellant had received certain DG Sets for repairs, reconditioning and/or for remaking, etc., which were originally cleared by them on payment of duty from their factory. The officers found that in some of the DG Sets either the engine or alternator or both were replaced with new engines or alternators. As such, they entertained a view that such replacement of the old engine/alternator with a new engine amounts to 'manufacture' and the applicants were required to pay duty on the same.
3. On the above basis, show cause notice was issued to them raising demand of duty in respect of 35 DG Sets. In respect of another 6 DG Sets, which were received back by the appellant in the year 1996-1997 and 97-98, it was found that the entries relating to the clearance were not completed, neither the said DG sets were physically present in the appellant's factory. Accordingly, the notice proposed to raise the demand of duty on 35 DG Sets as also on 6 DG Sets. In respect of another 3 DG Sets it was alleged that the appellants have used new engines/alternators, on which they have availed the modvat credit. Inasmuch as the said DG Sets were cleared without payment of duty, modvat credit was not available to the appellant in terms of Rule 57C. Notice also proposed imposition of penalty.
4. On adjudication, the Commissioner, vide his impugned order confirmed demand of duty of Rs. 1,83,452/- in respect of 6 DG Sets; of Rs. 19,03,261/- in respect of 35 DG Sets and also denied the modvat credit of Rs. 1,35,183/- in respect of 3 DG Sets. He also imposed personal penalty of Rs. 22,21,936/- on the manufacture unit M/s. Sudhir Engineering Company, along with imposition of personal penalty of Rs. 5 lakhs on Shri Sudhir Seth, Partner of the manufacture unit. The above order of the Commissioner is impugned before us.
5. We have heard Shri T. Vishwanathan, Ld. Advocate, for the appellants and Shri R. Pardeshi, Ld. JDR for the revenue.
6. Ld. Advocate appearing for the appellant contend that the issue involved in the present appeal is as to whether replacing the engines and/or alternators in the old DG Sets with the new engines/alternators amount to manufacture or not. He submits that the Commissioner has come to the findings of the manufacturer of new DG Sets on the ground that DG Sets acquire its identity with the model number and make of the engines and the alternators and inasmuch as both the parts are changed, the activity would result in emergence of new DG Sets having an identity different than the old set. He submits that the above view of the Commissioner is not in accordance with the settled position of law laid down by the various precedent decisions of the Tribunal, as also of the Hon'ble Supreme Court, wherein it has been held that such an activity of change of parts does not amounts to 'manufacture.' For the above proposition, he relies upon the various decisions.
7. Opposing the above stand of the appellants, Ld. JDR draws our attention on the latest decision of the Hon'ble Supreme Court in the case of Tecumseh Products India Ltd. v. Commissioner of Central Excise, Hyderabad, reported in 2004 (167) ELT 498 (SC) : 2004 (114) ECR 884 (SC).
8. We find that the Tribunal in the case of Shriram Refrigeration Industries Ltd. v. CCE, Hyderabad, , has referred to the clarification issued by the Government of India, vide their letter 2/7/1976, which is to the effect that if the goods were cleared after rectification of the defect in the same form, in which they were brought into the factory, the activity would not amount to 'manufacture.' In paragraph 7 of their judgment, the Tribunal also referred to two Supreme Court decisions for drawing distinction between the activity of manufacture and activity of repair. As such, it was laid down that the changing of certain parts with the new parts does not amounts to 'manufacture.' The above decision was confirmed by the Hon'ble Supreme Court when the appeal filed by the revenue was dismissed.
9. The said decision was followed by the Tribunal in their subsequent judgment in the case of CCE, Pune v. Dattanand Refrigeration Services Pvt Ltd. .
10. Similarly in the case of Metro Tyres Ltd., v. CCE, Chandigarh , it was held that repair and reconditioning of old and defective electric fans by replacing parts, rewinding of motor, refixing of new/old number plates and selling of such repaired/reconditioned fans with new guarantee cards does not amount to 'manufacture' as it does not result in production of a new article. Similarly, in the case of Rajasthan Tools Pvt Ltd., v. Collector of Central Excise, Jaipur , the activity of replacement of damaged or worn out segment of an old circular saw with a new segment, was held as an activity of repair and not a manufacture. We also take note of another decision of the Tribunal in the case of CCE, Jaipur v. Lipi Data Systems Ltd. , wherein the appellants were dismantling the old and used laser toner cartridge, replacing the worn out parts by new components and refilling the toner, such an activity was held as non-manufacturing activity, inasmuch as no new products different than the earlier came into existence.
11. We also note another decision of the Tribunal in the case of Commissioner of Central Excise, Meerut v. Samtel Color Ltd. 2001 (135) ELT 288 (Tri.Del), wherein even after observing that the defective picture tubes received from the customers for repairs in terms of warranty clause undergoing loss of identity during repair operations, salvage and inter-mixing of identical parts taking place between old and new tubes, but at the end a serviceable picture tube emerging in place of defective picture tube cannot be held to be a manufacturing activity.
12. The list of decisions holding on such an activity not amounting to manufacture is not exhaustive. In our view, the references to above decision is sufficient to conclude that the activity of changing the engines and/or the alternators in the old and damaged DG Sets received by the appellants would not amounts to manufacture even though the old DG Sets undergoes an identity change because of the model number and make of the replaced parts. The above finding is derived from the simple fact that what is received by the appellant was DG Sets and that has been cleared by them after replacement of parts is DG sets, and as such, it cannot be concluded that a new, distinct and identifiable product, different from the one received by the appellants has emerged.
13. At this stage, we may consider the Hon'ble Supreme Court's decision in the case of Tecumseh Products India Ltd. v. Commissioner of Central Excise, Hyderabad 2004 (167) ELT 498 (SC) : 2004 (114) ECR 884 (SC) relied upon by the Ld. JDR. After going through the said decision, we find that the ratio of the same is not applicable to the facts of the present case, inasmuch as the issue before their Lordship was as to whether while repairing defective compressors by replacing parts, such as stators on which the assessee carried out full range of processes would amount to manufacture of stators or not. The above fact becomes clear from the paragraph 1 of the order narrating the facts involved in that case. For better appreciation, we re-produce the same.
The question raised for our consideration in these appeals is whether while repairing the defective compressors any part such as stators replaced by the appellant involves manufacturing activity attracting duty under the Central Excise Act. The appellant in the process of repairing scraps some components which cannot be repaired and one such component is stators. The stators were earlier manufactured in the factory of the appellants for repairing of the compressors. Later, the materials required for replacing the scrapped components are received on payment of duty from the factory of the appellant. The Service Centre sends these materials to outside job workers for making the stators. Thereafter the appellant undertook the shaping, varnishing and baking of such stator to fit such stators into the compressor housing. The Collector having felt that the activity of shaping varnishing and baking done by the appellant on receipt of the stator from the job workers results in manufacture and initiated proceedings for adjudication of tax.
14. As is seen, the dispute was not as to whether change of parts of defective compressor amount to manufacture or not. The question was that the activity of shaping, varnishing and baking done by the appellant received from their job workers resulted in manufacturing activity or not. The Hon'ble Bench in paragraph 5 of their decision held that inasmuch as the stator was not ready for use in the compressor at the hands of the job workers and it is only activity at the appellants hand, which resulted in bringing into new stator, the appellant has to be held as manufacture of stators. As such, it was a case of new manufactured stator and not the replacement of the old compressor with the new parts, which was for consideration before their Lordships.
15. Having held that the activity of replacement of the old and use engine/alternator with the new one in the damaged DG Sets does not amount to manufacture, we find from the impugned order of the Commissioner, that he has observed that the appellants records showing return of the DG Set was not complete till the time of the visit of the officers and as such he has concluded that it is not clear as to whether such repaired DG sets were cleared or as to what is happened to the said DG Sets.
16. We accordingly, set aside the dimpugned order and remand the matter to the Commissioner for applying the ratio, as held by us, to the fact of the instant case and re-quantify the demand, if any, against the appellants.
17. We also find that modvat credit has been denied in respect of new engines/alternators used in the manufacture of 3 DG Sets on the ground that since the same were cleared without payment of duty, no modvat is available in terms of provisions of Rule 57C. We do not find any infirmity in the above reasoning of the adjudicating authority. In fact, having held that such activity does not amounts to manufacture and as such no duty is required to be paid on the DG Sets, being cleared for the second time, the legal consequence of the same would be that no credit would be available in respect of the inputs used for such repairs. Ld. Advocate appearing for the appellants, during the course of the arguments, informs that they are availing credit on the engines and the alternators used for such repairing activities and the old engines/alternators are repaired in their factory premises and captively used for the manufacture of the new DG Sets. However, he opposes the prayer of the LD. DR for reversal of modvat credit in respect of the parts used for repairing activity on the ground that there was no proposal to do so in the show cause notice.
18. We are not convinced with the above arguments. If the Commissioner is confirming demand of duty on the repaired DG Sets, he could not have, at the same time, asked for reversal of the credit. The reversal is to be made as consequences of holding that the activity of repair does not amount to manufacture and as such no duty liability stands against the appellants. The Tribunal and the Hon'ble Supreme Court, in many cases has held that when the goods were being cleared without payment of duty e.g. on wrong availment of exemption notification and the demand is subsequently confirmed on the same, the benefit of modvat credit cannot be denied to the assessee for the simple reason that while clearing the goods under an exemption notification, there could not have been any occasion for the assessee to follow the procedure and avail credit. The same becomes available to the assessee as a consequence of the confirmation of demand against him and should be allowed irrespective of non-following of procedure. For the same reason, in the event of demand being set aside by us, the appellant would have to reverse back the credit, as a consequence of the same. The revenue could not have raised the demand on repaired DG Sets as also for reversal of modvat credit at the same time. Admittedly, when the activity is being held as not amounting to manufacture with no duty liability, the appellant cannot avail the credit of duty paid on the new engines/alternators in terms of Rule 57C. As such, we hold that the appellants would reverse the credit on the engines and alternators used for the repair of DG Sets.
19. After having given our opinion on the legal issues involved we set aside the impugned order and remand the matter to the original adjudicating authority for applying the same to the facts of the instant case and quantify the duty, if any, against the appellants accordingly. The question of imposition of penalty would also be adjudicated by the Commissioner in the de novo proceedings.
20. All the appeals are disposed off in above terms.
(Pronounced in Court on 8.10.2004) Sd/- Sd/- (Shri S.S. Sekhon) (Mrs Archana Wadhwa) Member (T) Member (J) S.S. Sekhon, Member (T)
21. I had the privilege of going through the order prepared by Ld Member (J) and I am at a loss to agree with the same in entirety. While I am in agreement with the order and the findings as regards the activity of replacement/repairs involved of the damaged DG sets to be not amounting to manufacture, I am not able to persuade myself to agree on the other aspect, as arrived, as regards the plea by the Ld DR on reversal of Modvat Credit in respect of the parts used in and for repairing activity.
22. My findings & reasons on the plea of Reversal of credit, are as follows.
(a) It is well settled that the Tribunal cannot go beyond the issues raised. In this case, as cannot be seen from the Show Cause Notice and the issues decided by the Commissioner there was no case for recovery of Modvat Credit or for repairing activity. The order in appeal, especially of this Tribunal, cannot travel beyond the issues issued.
(b) It is found Section 35C states that Tribunal, after hearing the parties, may pass orders thereon that would empower the Tribunal to confine the orders on the subject matter of the appeal. The subject matter in the appeal relates to demand of duty on generating sets cleared without payment of duty, after repairs under Rule 173H in this case. While Section 35C stipulates that Tribunal will pass orders it thinks fit' following the decision of the Supreme Court in Hukumchand Mills Ltd. v. CIT , while interpreting the expression "pass orders as the Tribunal thinks fit", for the purpose of understanding the scope of Section 254, the Supreme Court held that the said expression would include all powers, excepting the power of enhancement which are conferred on the AAC while dealing with the first appeal." & the Gauhati High Court in Jeypore Timber and Venner Mills (P) Ltd. v. CIT observed as follows:
The Tribunal has no power for the enhancement of any penalty or assessment not can it remand a case with the object of such enhancement.
If such powers, as are proposed herein, of reversal of credit are exercised, & the Tribunal holds that Modvat credit is to be denied and recovered, then that will amount to enhancement of a liability i.e. amounts to be recovered, which is not permitted in law.
c) Further a denial of modvat credit on inputs used in the generating sets cleared and demanding the same, is not subject matter in this appeal. Hence, any direction to the appellants to pay the credit back will amount to making about a new case by the Tribunal, which is not permitted in law. This has been held so in the following cases:
(i) Hindustan Polymers v. CCE 1999 (106) ELT 12 (SC)
(ii) Rekitt & Colmanv. CCE .
(iii) Warner Hindustan v. CCE .
d) Revenue had the alternative and could have adopted 'protective assessment' routes. As whenever, there is a doubt as to whether income is to be assessed in the hands of A or B, Income Tax department makes substantative assessment on A and protective assessment on B. If it is finally held that substantative assessment of A is held as not correct, then the protective assessment of B is taken up for assessment. In such cases, the assessment against B is not barred by limitation. Such practice is approved by the High Court of Calcutta in the case of Jagannath Hanumanbux v. ITO 31 ITR 603. No bar to such a recourse is found on perusal of the provisions of Central Excise Act, 1944. In the present case, department could have issued protective show cause notice demands on the appellants denying modvat credit taken on inputs used in the generating sets cleared under Rule 173H especially when Supreme Court have categorically held that duty demands under Section 11A & recovery of modvat credit are mutually exclusive schemes.
e) The orders of the Tribunal allowing credit of duty paid on the inputs when the final product is held to be dutiable is, in view of Section 11A(2), are to require of determination of Excise duty due from a person on whom the show cause notice has been issued. While determining such duty liability, all aspects effecting re-determination, including the credit available on inputs is to be taken into account. This aspect of 'determining 'the short levy, non levy etc. cannot be equated to grant/denial of credit which is to be treated as per the modvat rules.
f) It has been pleaded that in the present case, the Engines on which credit is taken has been used in the generating set cleared under Rule 173H, after repairs, without payment of duty, the retrieved engine from the old generating set received engine from the old generating set received back under Rule 173H (on which no credit was taken), has been used in the generating set cleared on payment of duty. The credit availed initially on the engine used in generating set cleared under Rule 173H, has been utilized for making payments of duty on the generating set manufactured with the retrieved engine without any abatements in value. Though the procedure adopted by the appellant is peculiar, it was submitted there is no loss of revenue and there is also not undue gain to the appellants. This plea though attractive, is not upheld, since the inputs i.e. engines where not used in or in relation of manufacture of final products.
g) Granting of the request of reversal of credit on engines used up in repairs at this stage, would convert this Tribunal to a Exercise powers of a Court of equity which it cannot.
23. in view of the above the mater would be required to be referred to the third member.
Sd/-
(Shri S.S. Sekhon) Member (T) Difference of Opinion
24. In view of the difference in opinion, the matter may be placed before the Honorable President, to refer the following question for the opinion of the third member to resolve the difference. The question to be resolved is-
2. Whether, in the facts and circumstances of this case, the reversal of Modvat credit availed on inputs used up in repairs of DG sets could be ordered to be reversed?
Sd/- Sd/- (Mrs Archana Wadhwa) (Shri S.S. Sekhon) Member (J) Member (T) Moheb Ali M., Member (T) 25. The question to be resolved is framed as follows:
Whether in the facts and circumstances of this case, is reversal of Modvat Credit availed on inputs used in the repairs of DG Sets could be ordered.
26. The facts and circumstances are brought out in para 2 of the order recorded by Ld. Member (Judicial) and are not being repeated.
27. The Bench which heard the appeal agreed that in the instant case only repair is involved and not manufacture and therefore no duty is required to be paid on the repaired DG Sets. Thus the Bench rejected the contention of the Commissioner that the repairs carried out by the appellant amounted to manufacture. There is no dispute on this issue.
28. During the courses of hearing the Ld. DR submitted that if the Bench is of the opinion that repairing a DG Set does not amount to manufacture then it may order reversal of credit taken on the engines/alternator that have been used in the DG Sets while repairing. It is his contention that credit of duty paid on the components is available only when such components are used in the manufacture of final products. Logical enough, apart from the legal position enunciated in the modvat scheme.
29. The Ld. Advocate however, objected to such a proposal (reversal of credit) on the ground that there was no proposal to do so in the show cause notice. On this issue, Member (J) recorded her findings in para 18 of her order which is reproduced below:
We are not convinced with the above arguments. If the Commissioner is confirming the demand of duty on the repaired DG Sets, he could not have at the same time, asked for reversal of the credit. The reversal is to be made as consequences of holding that the activity of repair does not amount to manufacture and as such not duty liability stands against the appellants. The Tribunal and the Hon'ble Supreme Court, in many cases has held that when the goods were being cleared without payment of duty e.g. on wrong availment of exemption notification and the demand is subsequently confirmed on the same the benefit of modvat credit cannot be denied to the assessee for the simple reason that while clearing the goods under an exemption notification, there could not have been any occasion for the assessee to follow the procedure and avail credit. The same becomes available to the assessee as a consequence of the confirmation of demand against him and should be allowed irrespective of non-following of procedure. For the same reason in the event of demand being set aside by us, the appellant would have to reverse back the credit, as a consequence of the same. The revenue could not have raised the demand on repaired DG Sets as also for reversal of modvat credit at the same time. Admittedly, when the activity is being held as not amounting to manufacture with no duty liability, the appellant cannot avail the credit of duty paid on the new engines/alternators in terms of Rule 57C. As such, we hold that the appellants would reverse the credit on the engines and alternators used for the repair of DG Sets.
30. Having said so Member (J) recorded that the matter be remanded to the original authority for applying the reasoning contained in para 18 quoted supra and quantify the duty, if any, against the appellant. The Ld. Member (J) also held that the Commissioner to whom the matter is remanded may also consider imposition of penalty in the de novo proceedings.
31. The Ld. Member (T) differed with the findings of Member (J) and recorded his own on the issue of reversal of credit. His findings can be paraphrased follows:
(a) The Tribunal cannot go beyond the issues raised. Inasmuch as the show cause notice does not speak of reversal of credit, the Tribunal cannot now make out a fresh case. He relied on the decision of the Gauhati High Court in Jeypore Timber and Venner Mills (P) Ltd. v. CIT wherein the High Court observed "the Tribunal has no power for the enhancement of any penalty or assessment nor can it remand a case with the object of such enhancement." He observed that if such powers as are proposed by Member (J) of reversal of credit are exercised and the Tribunal holds that modvat credit is to be denied and recovered then that will amount to enhancement of a liability.
(b) Denial of credit and consequent reversal of the same is not a subject matter of appeal. Making a new case by the Tribunal is not permitted as laid down in Hindustan Polymers v. CCE 1999 (106) ELT 12 (SC). Rekitt and Colman v. CCE and Warner Hindustan v. CCE .
(c) The orders of the Tribunal allowing credit of duty paid on the inputs when the final product is held to be dutiable is in view of the provisions of Section 11A(2) under which Excise Duty due from a person on whom the show cause notice has been issued is determined. While determining such duty liability all aspects including the credit available on inputs is to be taken into account. This aspect of 'determining' the short levy, non-levy etc cannot be equated to grant/denial of credit, which is, governed under the modvat rules.
(d) The exercises would be revenue neutral. The appellant was reusing the defective engines after repair in the manufacture of new DG Sets, which are in turn cleared on payment of full duty. Thus while engines on which credit was taken were used in repairing the defective DG Sets, the engines removed from such defective sets were reused in the manufacture of new DG Sets (Customers please note).
(e) Granting of the request of reversal of credit on engines used up in repairs at this stage, would convert this Tribunal to a Exercise powers of a Court of equity which it cannot.
32. Heard both sides.
33. The Ld. Advocate for the appellant reiterated the finding of Member (T) as brought out in para (d) above. He demonstrated as to how the appellant did not benefit in any way by using engines on which credit has been taken in the repair of DG Sets. He relied on the decision in the case of Geep Industries wherein the Tribunal held that when revenue implication does not exist denial of Modvat Credit is not permissible. The Tribunal further held that charge of suppression involving larger period is sustainable only when an assessee wants to obtain a benefit not available to him under the law. The Ld. Advocate argued that the appellant has not availed any benefit not due to him, as the procedure adopted by him as brought out by Member (T) is revenue neutral.
34. The Ld. DR Shri R. Pardeshi argued that Member (J)'s observations in para 18 of her order flow from the facts of the case; that no new case is being made out at this stage; that show cause notice seeks to reopen an assessment wrongly made by the appellant; that when an assessment is reopened all aspects can be gone into by the Tribunal including the issue of eligibility of credit; that the Tribunal/Courts have accorded benefit of Modvat credit while confirming demand even though the availability of Modvat credit was never the subject matter before the various forums in those cases; that when the Tribunal holds that repairing does not amount to manufacture, it has to order consequential benefit to the Department in respect of Modvat credit involved; that the Hon'ble High Court of Madras in the case of Controller of Estate Duties v. R. Brahadeswaran Tax case No. 1170 of 1979 decided on 15th December 1982-1986 (028) Taxman 0181-MD relying on the decision of the Supreme Court in the case of Mahalaxmi Textiles Limited held that there was nothing in the taxing statute which restricts the Tribunal to the determination of question raised before the assessing authority all questions whether of law or facts which relate to the assessment can be raised before the Tribunal. He submitted that conclusions can be arrived at by considering the essentials of fiscal jurisprudence as held by the Hon'ble High Court in the case cited supra.
35. Having perused the orders recorded by Hon'ble Member (J) and Member (T) and having heard the rival contentions. I record my findings as under:
(a) The issue of non-availability of Modvat credit is specifically raised in the show cause notice (see para 13 of the impugned order). If reads "Deny and recover the Modvat credit amounting to Rs. 13,51,833/- availed on inputs used in finished goods which were cleared without payment of duty under Rule 57(ii) read with Rule 57AH of erstwhile Central Excise Rules 1944" The Commissioner having held that the repaired goods are dutiable could not have denied the credit because the question of denial of credit would arise only when the final goods are either exempt or attract Nil rate of duty as rightly pointed out by Ld. Member (J).
(b) Duties of excise are leviable on goods produced or manufactured. The assessment to duty therefore follows the factum of manufacture. The appellant's contention that there was no manufacture involved by the lower authority was not accepted and duty demanded by the lower authority. The appellant was working under SRP where he himself determines the duty liability on the goods cleared from his factory. He chose to determine that the repaired goods are not excisable. When the Department questioned this determination, it chose to reopen the assessment. When the assessment is reopened all aspects of assessment including availability of Modvat credit can be gone into as has been decided by the Tribunal and the Courts. In the present case demands were under proviso to Section 11(A)(1) of the Central Excise Act. I am unable to persuade myself to agree with the contention of Member (Technical) that the aspect of determining the short levy non-levy etc. cannot be equated with the Modvat Rules.' In my view the present case is one of reopening or an assessment and the issue of availability of credit or otherwise is integrally linked with the main issue. The Ld. Member (J) has not made out a new case as contended by Member (T).
(c) Member (Technical)'s observation that the Tribunal is not a court of equity and therefore cannot provide relief, if any, to the Department has been carefully considered. It is observed that the same Tribunal on several occasions has granted relief of Modvat credit to the appellants while confirming demands on account of short levy/non-levy. It is the larger interest of justice that prevailed with the Tribunal while granting such relief and the same larger interest of justice prevailed with the Member (J). I agree with her finding.
(d) As observed by the Hon'ble High Court of Madras a Tribunal is not a Civil Court, which settles civil disputes between the adversaries. It holds court to decide the tax liability or otherwise of an assessee. The Member (J) seeks to do that. I agree with her contention that Modvat credit is deniable when the final goods are held to be non-dutiable.
(e) Member (T) dealt with the contention of the appellant that there was no revenue. Since Member (J) has observed that the matter should be remanded for determining the Modvat liability the plea of revenue neutrality can always be taken before the original authority. I agree with the Member (J)'s contention that the issue be remanded to the original authority to determine the quantum of modvat credit that needs to be reversed if any.
36. The question before me is answered as follows:
37. In the facts and circumstances of this case the Tribunal is correct in holding that the reversal of Modvat credit availed of on inputs used in repair of DG Sets should be examined by the lower authority in remand proceedings. The Tribunal is within its powers to order such proceedings as recorded by Member (J).
38. The Registry may put up these findings before the Original Bench who heard the appeal for appropriate pronouncement.
Sd/-
(Shri Moheb Ali. M.) Member (T) FINAL ORDER
39. In view of the majority order, it is held that repairing activity undertaken by the appellants in respect of DG sets does not amount to manufacture. However, the modvat credit availed in respect of the inputs used in such repairing activity is required to be reversed. Accordingly, the appeal is remanded to the original adjudicating authority for quantifying the demand of duty and adjudging the penalty in terms of the majority order.
(Pronounced in Court on 6.5.2005)