1998 (12) TMI 255

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... t alter the item into a different product and there is no process of manufacture, therefore, he has held that it is continued to hold as capital goods and hence they are entitled for the credit. He has also held that not mere indicating by the assessee is only a procedural violation in terms of Rule 57T(1) of Central Excise Rules. Further he has noted that the appellants had filed a declaration and not merely intimating prior to use is a procedural violation. 2. The revenue is aggrieved with the finding and they contended that the item procured by the appellants was merely rough forged steel rounds and the assessee is subjecting it to machining to make the spare part for use with the capital goods would result, in the product falling unde .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... iled findings given by the Commissioner in para 5 of the impugned order, wherein the Commissioner has categorically held that the item was in the nature of spare parts and therefore it was capital goods. He has noted that the processes were only fitment activity and not an activity of manufacture and it did not undergo a change to make it a different article and also on such process the item had not acquired different characteristic, but continued to retain the essential character of the spare part i.e. radial insert. He has noted that so long as the basic facts namely the item is duty-paid and actually used in the appellants factory as spares, the mere fact that certain machining operation is done prior to use would not come in the way of .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ct and that it has changed its characteristics. Merely to say that it is an input and it is not a spare part, is not sufficient. It was required to have been proved with sufficient evidence to controvert the plea of the assessee that the item is not a spare part. It has been shown by the assessee, which has been accepted by the Commissioner that the item is not lost its characteristic of spare part and the activity of machining was only a fitment activity. The plea raised by the Counsel that if the processes were to result into a new product, then the revenue ought to have been proceeded on those lines and as the said course of action had not been adopted, therefore, the present plea raised is also not sustainable and is also justified. The .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X