9911796707
TMI Blog2004 (5) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1944 and imposed an equal amount of penalty under Section 11AC of the Act and Rule 173Q of the Central Excise Rules, 1944. 2.Appellants are engaged in the manufacture of colour picture tubes (CPTs for short) at their factory at Malanpur, District Bhind (MP). The CPTs so manufactured by the appellants are supplied to various colour TV manufacturers on payment of appropriate central excise duty. Sometimes buyers noticed defects in CPTs at the time of assembly of the TV. On receipt of complaint, appellants' engineers would go to the factory of the buyers and repair the same. Those CPTs which could not be repaired at the factory of the buyer were brought to the appellants factory following the procedure under 57F(4)/173H of the Central Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons, out of whom one instead of appearing in person sent a sworn affidavit to the Commissioner. 4.It is the case of the appellant that the term 'replacement' is used in the trade in a loose manner under the warranty clause and in some cases the CPTs are repaired by minor processes and in some other cases certain parts namely, purity magnets, rubber wedge, deflection yoke etc. will have to be replaced. The process is only repair. The adjudicating authority also holds that the process of repair would not amount to manufacture. But, on the basis of the word used 'replacement' the Commissioner comes to the conclusion that appellants are replacing defective CPTs with newly manufactured one and cleared without payment of duty. It is the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad failed to note condition No. 16. Clause 8(a) reads as follows : "Allow the vendor to replace the rejected goods within a specific time, the vendor bearing the entire cost of freight, delivery expenses handling etc. as such replacement without being entitled to any extra payment." Clause 16 reads as follows : "The vendor shall be liable and responsible for any defects in the designs, compositions or substance of materials and defect in the workmanship or process of manufacture. He shall make good by satisfactory replacement of supplies or repair any defects when under normal use appear therein or arise from defective composition or use of sub-standard materials, defective workmanship or process of manufacture of defective design, withi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ored his affidavit. 7.Yet another document relied on by the Commissioner is a letter dated 28-7-1998 of M/s. Texla Electronics Ltd. addressed to the appellants that they had received replacement of broken CPTs. Insurance claim of 71 CPTs according to the Commissioner is an indication that the appellants had been replacing broken CPTs with fresh CPTs in the garb of repairs. It is pointed out by the Learned Counsel for the appellant that in respect of 71 CPT while it was being transported to the appellants factory for repairs an accident 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld also show that there will be loss of electron gun in the process of vaccumisation of CPTs after mounting and sealing of electron guns. The appellant has also contended that the entire demand is barred by limitation. 9.We heard learned Departmental Representative who addressed arguments in support of the adjudication order. 10.As mentioned earlier Revenue is not taking the contention that repair of picture tube would amount to process of manufacture. This position is settled by the decision of this Tribunal in CCE, Meerut v. Samtel Color Ltd. - 2001 (135) E.L.T. 288. Then the only issue to be considered is whether the Revenue has proved in this case clandestine removal of CPTs by the appellant on the pretext of returning of repaired or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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