2004 (5) TMI 496 - AT - Central Excise

Summary

Issues:
1. Appeal against reversal of order-in-original regarding duty demand on computers/data processors.
2. Contention of evidence proving appellants' engagement in manufacture/assembly of computers.
3. Reiteration of admission of assembly of computers without payment of duty.
4. Examination of evidence, bills, and statements to determine appellants' manufacturing activities.
5. Rejection of Commissioner (Appeals) decision based on documentary evidence.

Analysis:
1. The appeal challenged the reversal of the order-in-original concerning duty demand on computers/data processors by the Commissioner (Appeals). The initial proceedings were initiated via a show cause notice for alleged non-payment of duty and lack of registration under Rule 174 of the Central Excise Rules.

2. The appellant's counsel argued that there was insufficient evidence to prove the appellants' involvement in manufacturing computers. They contended that the JCL 6000 data system assembled was not a computer and could be used independently. The Commissioner (Appeals) allegedly overlooked evidence showing purchases of computers and raw materials from the market, which were crucial in the adjudication process.

3. The Respondent reiterated the admission of assembly and clearance of computers without duty payment by the appellants' partner. This admission was considered substantial evidence supporting the duty demand against the appellants.

4. Upon review of the records, it was found that the appellants were involved in manufacturing Micro-computer based gas chromatograph and spectrophotometer digital Voltometer. The JCL 6000 data station, allegedly assembled by the appellants, comprised various components but was not considered a standalone computer. Documentary evidence, including bills and purchase details, supported the appellants' claim of purchasing computers and raw materials for repairs, rather than manufacturing.

5. The Tribunal concluded that the Commissioner (Appeals) erred in disregarding the documentary evidence provided by the appellants, which clearly indicated the purchase and sale of computers as bought-out items. The Commissioner's decision was based on the misconception that the JCL 6000 data system was a computer itself, neglecting the factual evidence presented by the appellants. Consequently, the Tribunal set aside the Commissioner's decision and reinstated the order-in-original, accepting the appeal of the appellants.