1995 (8) TMI 165 - AT - Central Excise

Summary

Issues:
1. Appeal against order-in-appeal allowing department's appeal under Section 35E(2) of the Central Excises & Salt Act, 1944.
2. Allegations of confiscation, duty recovery, and penalty imposition on appellants for reconditioning/repair of old electric fans.
3. Examination of whether reconditioning/repair activities amount to manufacturing under Section 2(f) of the Act.

Analysis:
1. The appeal arose from an order-in-appeal allowing the department's appeal under Section 35E(2) of the Central Excises & Salt Act, 1944. The Collector (Appeals) set aside the impugned order based on the argument that resale of old serviced goods with a new guarantee card amounts to manufacture under Section 2(f) of the Act. The appellants challenged this decision, leading to the current appeal before the Appellate Tribunal CEGAT, New Delhi.

2. The allegations against the appellants involved confiscation, duty recovery, and penalty imposition for their activities related to reconditioning/repair of old electric fans. The Additional Collector had previously dropped the allegations after a detailed examination, finding that the appellants were not manufacturing new fans but only repairing and reconditioning them. The Collector had not confirmed the duty demand and merely set aside the order, prompting the appellants to appeal the decision.

3. The crux of the issue revolved around whether the reconditioning/repair activities undertaken by the appellants amounted to manufacturing under Section 2(f) of the Act. The Tribunal, after a thorough examination of the evidence, concluded that the Collector had not applied his mind adequately in passing the order. The Tribunal highlighted that the reconditioning of old fans did not result in the production of new goods that were marketable or specified in the Schedule to the Act. The Tribunal referenced various legal precedents, including Supreme Court decisions, to emphasize that mere reconditioning or repair activities do not constitute manufacturing. Citing past judgments, the Tribunal reiterated that activities like repair/reconditioning/remaking, rerubberising, reprocessing, and reconditioning of products do not amount to manufacturing.

In conclusion, the Tribunal found the impugned order unsustainable in law and set it aside, allowing the appeal in favor of the appellants.