2009 (9) TMI 854 - AT - Central Excise

Summary

Issues involved: Appeal against duty demand, imposition of penalty, interpretation of Rule 16(3) of Central Excise Rules, 2002, Cenvat credit, repair activity not amounting to manufacture, time limitation for duty demand.

Summary:
The appeal was filed by the Revenue against an order confirming duty demand, interest, and penalty on the respondent for clearing defective colour picture tubes without payment of duty after repairs. The Commissioner (Appeals) set aside the duty demand and penalty imposed by the Dy. Commissioner.

The Revenue contended that the picture tubes should have been cleared on payment of duty as per Rule 16, even though the respondent had paid duty for subsequent repairs. On the other hand, the respondent argued that repair activity does not amount to manufacture, and they did not take Cenvat credit for the tubes cleared during the specified period.

The Tribunal noted that repair does not amount to manufacture based on previous judgments. Rule 16(3) allows manufacturers to take Cenvat credit at the time of receipt for returned goods, but since no credit was taken in this case, no duty was payable. The Tribunal also found that the necessary intimation for each receipt of goods had been given to the Deptt., making the duty demand time-barred under Section 11A(1).

Ultimately, the Tribunal dismissed the Revenue's appeal, finding no fault in the order-in-appeal due to the repair activity not constituting manufacture and the duty demand being time-barred.

(Order dictated in the open Court)