2010 (8) TMI 279 - AT - Central Excise

Cenvat credit repair of electrical motors - respondent cleared the whole transformer on payment of duty but they have reversed the only portion of the input used in repair of the transformers - applicability of Section 11D of the Act, it was again observed by the Jt. Commissioner that Section 11D speaks of duties of excise collected from the buyers to be deposited with the Central Government and provisions of Section 11D(1) specify that every person liable to pay duty under this Act - no allegation that they have not paid the duty - nothing on record that the respondent had collected any amount as duty over and above the amount paid by them Order upheld

Summary

Issues: Revenue appeal against Commissioner (Appeals) order upholding Order-in-Original; Liability on repair work for electrical motors; Duty payment on repaired transformers; Applicability of Section 11D of Central Excise Act.

In this case, the Revenue filed an appeal against the Commissioner (Appeals) order, which upheld the Order-in-Original rejecting the Revenue's appeal. The issue revolved around the respondent's repair work on electrical motors, where they reversed Cenvat Credit when using inputs for repair. The Revenue contended that the repair work did not attract duty payment, and any deposits made should be treated as per Section 11D of the Central Excise Act. The respondent argued that they were manufacturers of transformers, and the repair work did not constitute job work, as they had already paid duty on the transformers manufactured and cleared. They maintained that the duty liability was discharged when parts were replaced during repair work. The Jt. Commissioner clarified that duty payment was required only on inputs used for repairs, not on the entire transformer, and the duty payment was akin to non-availment of credit on inputs issued for repair work. The Jt. Commissioner also ruled that Section 11D(1) did not apply as the respondent had already paid duty on inputs used for repairs. The Commissioner (Appeals) concurred, noting that there was no excess duty collected by the respondent. The case law cited by the Revenue did not support their argument, as repair of old transformers was not considered manufacturing. Both lower authorities correctly analyzed the situation, leading to the rejection of the Revenue's appeal and upholding of the impugned order. The judgment concluded that there was no merit in the appeal, and the impugned order was upheld.