2000 (5) TMI 475 - AT - Central Excise

Summary

Issues:
1. Duty leviability on coal tubs manufactured by the appellants.
2. Whether the process of fitting and assembling components of coal tubs amounts to manufacturing activity.
3. Inclusion of demands for repaired coal tubs in the confirmed duty.
4. Availability of exemption under Notification No. 182/87 for coal tubs produced in the workshop.
5. Entitlement to avail Modvat credit on duty paid on inputs.

Analysis:

1. The dispute in the appeal revolves around the duty leviability on coal tubs manufactured by the appellants. The impugned order confirmed a duty amount of Rs. 1,58,38,712/- for coal tubs cleared during a specific period, with an additional penalty imposed on the appellants.

2. The main argument presented by the appellants was whether the process of fitting and assembling various components of coal tubs constitutes a manufacturing activity as defined under Section 2(f) of the Central Excises Act, 1944. The Commissioner rejected the appellants' contention, stating that the process results in a new product classifiable under a specific sub-heading. The Tribunal agreed with the Commissioner, emphasizing that the assembled product is distinct from the individual parts purchased by the appellants.

3. Another issue raised was the inclusion of demands for repaired coal tubs in the confirmed duty amount. The appellants argued that repairing activities should not be considered a manufacturing process, and therefore, no duty should be levied on repaired items. The Tribunal concurred with this argument, stating that duty is not applicable to repaired items.

4. The appellants also claimed the benefit of exemption under Notification No. 182/87 for coal tubs produced in their workshop and used in mines. Although this benefit was not claimed before the Commissioner, the Tribunal remanded the matter for a fresh decision on the availability of the exemption and the potential utilization of Modvat credit on duty paid on inputs.

5. Lastly, the issue of the limitation period was not pressed before the Tribunal, leading to no specific orders on the same. The appeal was allowed for a remand to the Commissioner for a fresh decision based on the observations made during the proceedings.