TMI Blog2001 (1) TMI 543X X X X Extracts X X X X X X X X Extracts X X X X ..... had purchased a shovel from M/s. TELCO, Jamshedpur in the year 1982. This shovel was transferred to their factory at Madukkarai in March, 1986. This unit purchased some other necessary attachments of crane from M/s. TELCO on 30-4-1994. Those attachments were purchased on payment of Central Excise duty. The whole equipment was since being used as crane at the Madukkarai factory of the appellants. The attachments for the crane were cleared by M/s. TELCO under invoice dated 30-7-1994 on payment of duty of Rs. 3,37,106.25. The crane was seized by the officers on the reasonable belief that the same was manufactured and used captively without payment of Central Excise duty on a new product which emerged as a result of such manufacturing process. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e No. 105, dated 30-7-1994, at the time of purchasing the crane attachments from M/s. TELCO, no duty was required to be paid on conversion of the shovel equipment into the crane. 2. The department, however, initiated proceedings against the appellant. They were issued a notice dated 7-9-1995 in which they were called upon to show cause to the Commissioner of Central Excise, Coimbatore as to why duty amount of Rs. 2,82,172/- should not be demanded from them under Rules 9(2), 173Q and 226 and why a penalty should not be imposed on them under Rule 173Q of the Central Excise Rules, 1944. On consideration of the reply of the party and hearing their case in a personal hearing, the Commissioner passed the Order-in-Original, dated 22-7-1996 in wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the purpose of quantifying the total amount of duty confirmed on them has been fastened on to item. It is emphasized that the Commissioner in his order has agreed to the claim of the appellants for the Modvat credit on the inputs items. The Commissioner has observed that the quantum of Modvat credit available has to be determined by the jurisdictional Asstt. Commissioner after verification of relevant documents. In this regard, attention is drawn to para 3 of the Order-in-Original in which it is admitted that the appellants had paid a minimum of Central Excise duty of Rs. 3,37,106.25 on the crane attachment which in terms of the findings of the Commissioner would be available as Modvat credit to them. It is contended that since the duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er for using the same for lifting purpose, etc. The contention of the appellants that the crane after attaching it to the shovel equipment obtained in knocked down condition remained as crane and no new product had come into existence has force in view of facts presented before us. The attachment of shovels and lifting arrangements are only attachments to the crane. The contention that no new product has emerged in this process is evident even from the fact that the Commissioner in his order has not classified the new product under any of headings of the Central Excise Tariff. We, therefore, accept the contention of the appellant that in this process no new product has emerged so as to subject it to Central Excise duty. It is observed from ..... X X X X Extracts X X X X X X X X Extracts X X X X
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