9911796707
TMI Blog1999 (4) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... chine had been imported in January, 1988 by M/s. Hindustan Motors, and its assessable value was Rs. 25,33,356/-. With the customs duty of Rs. 22,80,020.40, its landed cost came to Rs. 48,13,376.40. The machine was brought in the premises of M/s. Gehring India under Rule 173H of the Central Excise Rules, 1944 (hereinafter referred to as the Rules ). The conversion cost was of Rs. 44,13,200/-. Further a sum of Rs.4 lakhs was charged as service charges. In the show cause notice dated 6-3-1992, it was alleged that the conversion of the Honing Machine by the appellants amounted to the manufacture of a new machine and that the matter was not covered by the provisions of Rule 173H of the Rules. It was proposed that as against the declared value o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... modification under the provisions of Rule 173H of the Rules. The Collector of Central Excise, Kanpur had accorded permission under Rule 173H of the Rules for bringing the machine in question in the factory of the appellants. It was his submission that the central excise duty could be demanded only on the cost of the machine. The customs duty paid on the import should be excluded; service charges should also be excluded. The appellate authority had already agreed that the depreciation was allowable. He referred to the Tribunal s decision in the case of Refco Icematic Co. v. Collector of Central Excise, New Delhi - 1999 (105) E.L.T. 247 (Tribunal) =1998 (78) ECR 462 (Tribunal) wherein it had been held that the assessable value had to be arri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st (including customs duty thereon) was Rs. 48,13,376.40. In the show cause notice, it had been proposed that instead of Rs. 44,13,200/-, the assessable value was to be calculated with landed cost of machine + conversion charges + service charges equivalent to Rs. 48,13,376.40 + Rs. 44,13,200 + Rs. 4,00,000/- total Rs. 96,26,576.40. The appellants had admitted that central excise duty was payable by them but had contested the value on which the duty was leviable. 5. The appellants had sought permission to bring into their factory the machine which had earlier been imported by their customers, on the basis of the facts as given in their application. The permission was granted by the Collector of Central Excise with reference to the facts t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of designs or methods of construction : Provided that where such goods or parts thereof are required to be brought into the factory or warehouse of an assessee for any of the purposes specified in clause (c) such goods or parts thereof shall be brought into such factory or warehouse within a period of one year from the date of their initial removal from the factory or warehouse or within the period of warranty or guarantee provided in respect of such goods by the assessee, whichever is more : Provided further that the Collector may, on a representation being made to him in this regard, if he is of opinion that having regard to the circumstances of the case, it is necessary so to do, by order extend the period specified in the first prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the process of manufacture. Earlier when the Rule 173H had been amended on 26-6-1976, simultaneously by their letter dated 2-7-1976, the Government clarified as under :- It may however, be noted that re-making, refining, re-conditioning or subjecting the goods to any other similar process will not amount to manufacture if the goods are subsequently cleared after rectification of defect in the same form in which they were retained or brought into the factory. (Refer para-6 of the Tribunal s decision in the case of Shriram Refrigeration Industries Ltd. v. C.C.E. - 1986 (26) E.L.T. 353 (Tribunal). 7. In the present case, the goods had not been cleared in the same form in which they were brought into the factory. The goods received and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oses of assessment to duty". 10. He had held that the depreciation value of the machine should form part of the value of the new machine. In the depreciation value of the machine, the material cost of the components used and the service charges were to be included to arrive at the value of the new machine for the purposes of the assessment. 11. We find that although the adjudicating authority had referred to the packing charges of Rs. 50,000/- but while arriving at the assessable value of Rs. 96,26,576/- only the landed cost of the machine, material expenses in modification and the service charges had been taken into account. The packing charges had not been added in the value assessed. To that extent, the remand order had gone beyond t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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