TMI Blog2000 (12) TMI 176X X X X Extracts X X X X X X X X Extracts X X X X ..... ying out the rectification, they have several service centers. M/s. Kirloskar Brothers have agreement with the persons operating such centres. The defective compressors are received by the Area Offices of M/s. Kirloskar Brothers Ltd. From there, they are sent to the service centres of that area. The movement of the defective compressors was under the set of documents which show the distinctive number given to each compressor when it initially had left M/s. Kirloskar Brothers Ltd. After the defects are set right, the compressor is sent to the area offices from there it was received. The complainant customer does not have to wait for the entire activity of repair etc. but on receipt of the defective compressor, the area office itself supplies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 02/CEX/1998 is more elaborate than the other judgment. His findings are, however, identical. He held that there was no positive evidence to show that the manufacture of new compressor was involved in the process undertaken by the assessee. He, therefore, declined to confirm the demand raised. He, however, held that the notices did not have a licence or a registration and on this ground while dropping the demands, he imposed penalties on these two appellants. Against these orders, the Revenue have filed the three appeals. The assessees have filed cross-objections contesting the imposition of penalty. 4.We have heard Shri A. Hidayatullah, Sr. Counsel appearing along with Shri M.P. Baxi, Advocate for the respondent units. We have heard Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertaking the repairs thereof. The replaced parts were not always new but were often reconditioned old parts. In the judgment in the case of Karna Industries, the procedure adopted was narrated in paragraph 2 of that order. The facts in Karna Industries case are more akin to the facts of the present case where the replacement work resulting in the customer receiving an entirely different product from what was surrendered by them. In the case of Shriram Refrigeration Industries Ltd. the Tribunal held that the activity of repair/reconditioning/remaking did not amount to manufacture of any new articles. The judgment was relied upon and followed in later judgment in the case of Karna Industries where the findings were the same. 7.The Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld in the present case also that the process undertaken by the two respondents did not amount to manufacture and that they are not liable to pay duty. The fact that in the cited case Rule 173H was under discussion is not relevant, nor does it operate as a bar for application of the ratio thereof. 11.The Revenue appeals, therefore, do not succeed and are dismissed. 12.In the cross-objection filed by the respondents to the present appeals, agitation is made of the penalties imposed upon the two units. The penalties were imposed on the conviction of the Commissioner that the activity undertaken by the units were covered under the phrases used in Sec. 6 of the Central Excise Act, 1944. We find that where it was held that the respondents ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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