1998 (8) TMI 342 - AT - Central Excise

Summary

Issues:
1. Whether the processes carried out on the conveyor rollers amount to manufacture and attract duty payment.
2. Whether the duty paying documents accompanied the goods and if prior permission was required under Rule 173.

Analysis:
1. The appellant, a manufacturer, received conveyor rollers for repair from another company. The department contended that the processes undertaken by the appellant amounted to manufacture, thus attracting duty payment. The departmental representative supported this claim by stating that duty paying documents were not produced. However, upon examination, it was found that the processes mainly involved dismantling, replacing parts, reassembling, and painting, which did not result in a significant transformation of the goods. The Tribunal noted that returning goods in the same condition as received does not constitute manufacture, as per relevant legal precedents and government circulars. Therefore, the processes carried out by the appellant were considered as reconditioning rather than manufacturing, leading to the appeal being allowed and the impugned orders set aside.

2. Another issue raised was whether duty paying documents accompanied the goods and if prior permission was required under Rule 173. The appellant argued that this point was not raised in the initial notice and, therefore, could not be considered by the Collector (Appeals). The Tribunal agreed with this argument, stating that the department could not introduce new grounds not arising from the Assistant Collector's order during the appeal process. Similarly, the requirement of prior permission for bringing in goods from another manufacturer was deemed irrelevant in this case. As a result, the Tribunal concluded that duty was not payable due to the absence of these grounds in the original notices, ultimately leading to the appeals being allowed and the impugned orders being set aside.