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TMI Blog2011 (3) TMI 1105X X X X Extracts X X X X X X X X Extracts X X X X ..... ould not be in accordance with the law - Merely because the appellant did not inform the department, by itself cannot be made a ground to attribute them with any malafide or deliberate suppression with an intent to avoid payment of duty - When the said trading activities being reflected in the statutory records and in the returns filed with the sales tax authorities, it cannot be held that there was any intent to evade payment of duty, on the part of appellants accordingly hold that the demand is also hit by bar of limitation - Decided in favour of assessee. - E/370 to 372 of 2007 - - - Dated:- 3-3-2011 - Hon'ble Mrs. Archana Wadhwa, Member (Judicial) Hon ble Mr. B.S.V. Murthy, Member (Technical) Appellant : Shri P.M. Dave, Advocate Respondent : Shri J.S. Negi, SDR Per : Mrs. Archana Wadhwa; The impugned order stands passed by the Commissioner in denovo proceedings when the matter was remanded by the Tribunal to decide the issue afresh in the light of the decision of the Andhra Pradesh High Court in the case of XI Telecom Limited vs. Supdt. of Central Excise, Hyderabad 1999(105) ELT 263 (AP) 2. As per facts on record, the appellants are engaged in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specification and the ready to be used as wheel aligner at site. As a result of above investigation, revenue entertained a view that appellants are manufacturing the wheel aligner and were clearing the same without payment of duty. Accordingly, proceedings were initiated by issuance of show cause notice dated 24.03.2004 for confirmation of demand and imposition of penalties, resulting in passing of present impugned order. 6. Learned advocate Shri P.M. Dave appearing for the appellants draws our attention to the undisputed facts that they are purchasing the five items in question and bringing to their godown and from where the same are being directly dispatched to the customer s site without doing any process in respect of any of the item. He submits that a customs based software is loaded in the computer at the site. By drawing our attention to the various items as projected by way of diagram, in the paper books, he demonstrates the use of these five different items. He has also drawn our attention to a certificate given by the appellant s engineer. Drawing our attention to the fact as to how the said five items are used at the customer s site, he submits that no manufacturing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... op with the help of the sensor are fed to the computer through the cable attached to computer. The data so fed is matched with the specifications already in the computer. The angle of the wheels to be aligned is then displays by the computer on the monitor in graphics format. The mechanic then adjust the wheels accordingly using spanners and other tools which are already existing in the workshop. This is a complete mechanical hob in which the wheel alignment computer does not do any function. After this job is done allt he components i.e. Sensors, Sensor Holders, Turn Tables etc. are removed from the vehicle and are put back into the corner of the workshop. Then the car is taken out from the workshop. All the items are kept loosely and individually. All the items have independent roles to play. No processing is also undertaken. On need basis, the sensor is mounted on the wheels to capture the data that data is sent to computer through the cables connected at that moment. Most of these items are also used for other purposes such as computer for office work, Trolley to keep other items like PUC, m /c. etc. and Trun Table to par and move the vehicle. The entire work for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an independent machine known in the market as such and has held that the same is an excisable commodity different from its part and is chargeable to excise. However, we are of the view that the issue No. 2 is required to be addressed first, i.e. whether the appellant has undertaken any manufacturing process or not. If the answer to the said issue is in the negative, the all other issues become infructuous. If no activity of manufacture, as defined in the provisions of Section 2 (f) of Central Excise Act, is being undertaken by the appellant, no duty liability would get fastened upon them. 12. While discussing the second issue, Commissioner has accepted the appellant s stand that they are purchasing all the five parts either from the indigenous market or by import. On receipt of an order for Computerized Wheel Aligner, their engineer visits the site and pit is made according to the diagram. Admittedly, the said pit has to be made properly as otherwise the equipment would not work. Thereafter, parts of the computerized wheel aligner are sent from their godown and are connected at the site of the party. Finally the wheel alignment software is loaded in the computer and the machin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w and different article must emerge having a distinct name, character or use. It is not enough if there is change, the change should result in bringing into existence a new and definite article having a distinctive name, character or use and the said article must be marketable and it should be known to the market as such. In the absence of any one of the ingredients referred to above, the provisions of the Act are not attracted and no excise duty is leviable. Even if the goods so produced were excisable goods mentioned in the schedule, they cannot be subjected to duty unless they are marketed or capable of being marketed. The marketability is one of the principle test in determining the liability to excise duty. In addition the product which is brought into existence must have a distinct identity in the commercial world. By applying the above test to the facts of the case present before the Hon'ble High Court, it was seen that the appellants were putting the duty paid manufactured items in one kit and selling the same to the telecom department. Some of the goods in the cable jointing kit was being manufactured by the appellants himself and some of the goods were being procured ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assembly of various imported goods into a kit used by the Doctors to connect the heart lung machine with oxy-generator and to the patient body during open heart surgery would amount to manufacturing or not. In the said case, before the Tribunal, the manufacturing flow chart of the custom pack showed the various stages of processes undertaken by the appellant like tube cutting, taping, capping, joint, tie-band, laying sub-assembly, sash wrap, final wrap, pack label, heat seal, infection sterilization, packing PUC release etc.0 The majority judgment in the said case held that all the items assembled in a pack already were already in existence and arranging them in a particular order and thus putting them together as a set for ready use, then the items retained their individual entity, cannot be held to be a result of manufacture. As such, by making a distinction between manufacturing and packing, it was held that activity undertaken by the appellant was one of packing and not manufacturing. By taking note of various decisions including the Hon'ble Supreme Court judgment in the case of Narne Tulaman Manufacturers Pvt. Limited 1988 (38)ELT 566 (SC), it was held that no new and commerc ..... 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