2004 (2) TMI 548 - AT - Central Excise

Summary

Issues: Challenge against order passed by Commissioner (Appeals) regarding clearance of flow meters for repairs without payment of duty under Rule 173H and Rule 9(1).

Analysis:
1. The appellants, manufacturers of flow meters, challenged the order passed by the Commissioner (Appeals) alleging contravention of Rule 173H and Rule 9(1) by bringing flow meters for repairs without original duty paying documents and clearing them without payment of duty.

2. The Commissioner (Appeals) rejected the appellants' contentions despite them providing evidence that the returned flow meters for repair bore serial numbers matching those noted on original invoices at the time of clearance. However, the Commissioner observed that no verification was conducted by Central Excise Officers to confirm the appellants' claims.

3. The appellants argued that Central Excise Officers had verified the returned goods and noted their serial numbers, making it easy to compare them with the original invoices. The Department contended that without such a comparison, the appellants' contentions could not be accepted.

4. The Tribunal found merit in the appellants' complaint, emphasizing that the original invoices were permanent documents, and the Department could have easily verified the serial numbers of the returned flow meters with those on the original invoices. The Tribunal held that the Department cannot ignore available evidence and claim the repaired flow meters were different goods without proof. The Department did not prove that the repaired goods amounted to manufacturing fresh goods attracting excise duty. The Tribunal cited a relevant decision in support of the appellants' case.

5. Consequently, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellants, highlighting the error in rejecting the appeal based on the Department's failure to verify the returned goods against the original invoices.