Customs, Excise and Gold Tribunal - Delhi
Ashok Manufacturing Co. (P) Ltd. vs Commissioner Of Central Excise on 17 November, 2003
Equivalent citations: 2004(92)ECC595, 2004(176)ELT205(TRI-DEL)
JUDGMENT
V.K. Agrawal
1. The issue involved in this Appeal filed by M/s. Ashok Manufacturing Co. (P) Ltd. is whether duty of excise is payable by them on the duty paid machines received back and cleared after repair.
2. Shri B.L. Narsimhan, learned Advocate, submitted that the Appellants cleared one machine namely AMC CNC Turret Punch Press Model Proteus under Invoice No. 289 dated 7.3.95 to M/s. Asiatic Electronics Industries; that since the said machine was not able to perform the desired function as per their requirement, the customer returned the machines to the Appellants on 27.11.95; that on receipt of the machines they had filed a declaration in the form D3 with the Central Excise Department; that after seeking ex tension of time for retaining the said machines in their factory, they cleared the same to another customer with certain modification without payment of duty under Rule 173 H of the Central Excise Rules, 1944; that the present demand of duty has been made against the clearance of the said machines after modification on the ground that the model No. of the machine was changed from M1030 to M1107 which cannot be treated as clearance of the same machine. Learned Advocate, further, submitted that the return of the machine from their first customer is not in dispute; that as their second customer namely M/s. Fabionix, Bangalore had not specified certain features and accessories which the machines was having at the time of initial clearance, the Appellants had to remove certain components and features from the machine to exactly suit the requirement of the customer; that there is no basis or evidence whatsoever to say that the machine resold by them is a different machine from the one received back by them from their first customer. The learned Advocate referred to both the invoices issued to their two customers wherein the Model No. of the machine is mentioned as 206 and S. No. 710; that the Nos. 1030 and 1107 on which reliance has been placed by the Revenue are not Model Nos. but are the numbers allotted to by their selling agent on receipt of each and every purchase Order; that it is only because of this reason that the number is changed from M1030 to M1107. Finally, he submitted that there is no requirement under Rule 173H, as it existed at the relevant time; that the machine received back by the customer should be returned to the same customer after being repaired or reconditioned; that, therefore, the finding of the Commissioner (Appeals) in the impugned Order, that the goods should have been sent to the original consignee is incorrect and unsustainable.
3. Countering the arguments Shri D.N. Choudhary, learned Senior Departmental Representative submitted that it is an admitted fact that the Appellants had removed one of the major technical features of the machine that is auto indexing tool from the machine which was received back by them in their factory; that this very fact goes to show that the machine which has now been cleared by them is a machine distinct from the machine received back by them in their factory having different functions, and, therefore, a new product has come into existence on which Central Excise duty is chargeable.
4. Learned Departmental Representative also submitted that it is not in dispute that the description of the machine as mentioned in the invoice issued on 7.3.95 at the time of initial clearance and in the invoice dated 6.4.98 issued at the time of second clearance is different; that this also shows that a different machine has been cleared without payment of duty.
5. We have considered the submissions of both the sides. It is not in dispute that AMC CNC Turret Punch Press Model Proteus 206 was removed on payment of duty by the Appellants on 7.3.95. This machine was cleared alongwith tools and accessories. The machine was received back in November 1998 as it did not perform the desired function and the Appellants had filed D-3 declaration. It has also not been disputed by the Revenue that from time to time the Appellants had sought extension of time for retaining the said machine in the factory. We observe from the Invoice No. 04 dated 6.4.98 under which the machine was old to M/s. Fabionix, that the Model No. of the machine is the same 206 and the S.No. is also the same. The revenue has not succeeded in rebutting the submissions made by the learned Advocate that the other number M 1030 and M 1107 are the purchase Order number allotted by the selling agent on receipt of Purchase Orders. The mere fact that certain features of the machines have been removed will not make it a new machine as it remains a Punch Press machine. We also agree with the learned Advocate that it was not a mandatory requirement under the proviso of Rule 173H of the Central Excise Rules, 1944 that the goods, after repairing or reconditioning or after subjected to any similar process, be sent to the same person from whom the goods were received back. We, therefore, set aside the impugned Order and allow the Appeal.