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TMI Blog2006 (5) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise authorities under a D-3 return. Later on, it was restored to good condition and cleared on 31-3-94 without the paying of any central excise duty. That clearance was also included in the monthly return of clearance of goods from the factory. 2. The appellant's unit was subsequently audited by Central Excise authorities. On 31-3 99, a Show-cause Notice was issued alleging that the appellant mis-declared the clearance of March, 1994 as repaired transformer; but actually it was a case of clearance of a manufactured transformer without payment of duty. The notice raised a duty demand of about Ks. 1.6 lakhs and also proposed imposition of penalty. The Notice also alleged that the duty evasion was by suppression of facts with inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s cleared the re manufactured transformer in the guise of repaired transformer and the central excise duty of Rs. 1.58 lakhs ought to have been paid on the said re manufactured goods and the demand is rightly sustainable in law." 5. He also rejected the appellant's submission that there was no suppression of facts. What prevailed with the Joint Commissioner for such a finding was the fact that appellant did not make available the insurance claim or the survey report about the damaged transformer. 6. Aggrieved with, this order, the appellant moved an appeal before the Commissioner (Appeals). He also noted that it is seen that "in respect of dam aged transformer, substantial repairing has taken place and these are more of re placement in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be treated as coming under the provisions of Rule 173H of the Central Excise Rules, 1944. 10. The factual situation revealed by the record as well as the impugned orders do not support the contention that a new transformer had been manufactured by using salvage and other parts. Instead, it is a case where dam aged parts were replaced and original machine restored. This is clear from the finding of the lower authorities. I have already reproduced the observations of the original and the Appellate authorities. The Joint Commissioner's finding was that "it is seen that in respect of damaged transformer, substantial repairing has taken place and this is more of replacement in nature where repair of damaged goods was not possible and the notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cope. Irrespective of scope. It may be watched. It remains repair. 13. This is fully recognized by Rule 173H. It covers activities including "re-conditioning" and "re-making". Re-conditioning and re-making can involve extensive replacement of parts. Extent of that cannot be determinative of whether the activity is of a re-making or the manufacture of new goods. 14. There is merit in the appellant's contention about bona fides also. It had entered each part of the transaction in the books of accounts and also intimated them to the Central Excise authorities. Non-reporting of insurance claim in regard to damaged or destroyed goods cannot raise a presumption of intent to evade duty. These are routine activities and excise has no concern wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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