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TMI Blog2019 (11) TMI 956X X X X Extracts X X X X X X X X Extracts X X X X ..... essary to advert to the substantial question of law are as under : (i) Appellant was engaged in the manufacture of Colour Picture Tubes (CPTs) falling under Chapter Heading No. 8540 of the Central Excise Tariff, Act, 1985. The appellant used to import parts of picture tubes for use in manufacture of Colour Picture Tubes at concessional rate of duty under exemption notification No. 25/99-Cus., dated 28-2-1999 and this notification exempts the goods specified therein from import duty when they are used in manufacturing of finished goods. (ii) Appellant was receiving defective CPTs in addition to the material for manufacturing CPTs. It is the case of the appellant that since returned defective colour picture tubes were completely dismantled and issued for production as fresh picture tubes, therefore, such re-manufacturing involves use of parts imported under notification No. 25/99-Cus., dated 28-2-1999 as are also used in the case of regular manufacturing. According to the appellants, CPTs were received by it under the provisions of Rule 16 of the Central Excise Rules, 2002 which reads as under :- "Rule 16. Credit of duty on goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proposed under Section 28 of the Customs Act, 1962 besides interest under Section 28AB of the Customs Act, 1962 and penalty under Section 114A of the Customs Act, 1962. 4. It is the case of the appellant that since returned CPTs have been dismantled completely and converted into new CPTs, therefore, such activity amounts to manufacture. It is submitted that demand is time barred and not sustainable and further Chartered Accountant had issued certificates to the effect that appellant had not repaired any returned CPTs, but were re-manufacturing the same as is apparent from certificate enclosed as Annexure A/4 and same fact has been reflected in the balance sheet. It is further contended that appellant has also informed the department vide letter dated 23-5-2001 about such repairs, and therefore, department could not have raised a plea that they were not informed about such repair work being undertaken by the appellant. On such grounds, learned counsel for the appellant prayed for setting aside the Final Order dated 12-8-2015 passed by the Appellate Tribunal, Delhi [2016 (333) E.L.T. 356 (Tri.-Del.)], so also to quash original order dated 20-3/26-3-2010. 5. Learned couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent occurred en route and the CPTs were totally broken. Since CPTs could not be repaired appellants replaced 71 CPTs. In respect of the above mentioned 71 CPTs appellant had paid central excise duty and interest under intimation to the Superintendent, Central Excise Range before issue of show cause notice. Thus the only goods where insurance claim had been made. 8. It is also contended by the appellant that the fact that they had reversed Modvat credit to the extent of Rs. 3,40,398/- on components like Magnet, Compation plate, Sonibond, Rubber Wedge, etc. used in repairs of such defective CPTs would clearly show that they carried out repair work and not replacement. Learned Counsel for the appellant would further submit that there were no evidence of any excess production produced by the Department. It was also submitted that denial of Modvat on electron gun is totally unsustainable. If the loss of electron gun during the process is taken into account correctly it will be seen that there is no diversion of electron gun. According to the appellant reliance placed on MIS reports by the Commissioner is unjustified. Month-wise MIS report would show the figures of mount yield var ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (51 of 1975) specified in the corresponding entry in column (2) of the said table, when imported into India for use in the manufacture of the finished goods specified in the corresponding entry in column (4) of the said Table, from so much of that portion of duty of customs leviable thereon which is specified in the said First Schedule, as is in excess of the amount calculated at the rate of - (a) 5% ad valorem in the case of the imported goods specified in List A; (b) 15% ad valorem in the case of the imported goods specified in List B; (c) 25% ad valorem in the case of the imported goods specified in List C : Provided that the importer follows the procedure set out in the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996." 9. The order in the case of Hotline CPT Ltd. v. Commissioner of Central Excise, Indore, as reported in 2015 (318) E.L.T. 141 (Tri.-Del.) is distinguishable on facts inasmuch as there is a finding that process was undertaken by the appellant for remaking of returned goods so disclosed to the department. Here the emphasis is on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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