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2018 (1) TMI 529 - AT - Central ExciseDeemed Manufacture - laptops - It appeared that as per Note 6 to Section XVI of the first schedule to the Central Excise Act, 1985 and also as per Section 2 (f) (iii) of the Central Excise Act, 1944, the processes carried out on the imported laptop computers amounted to manufacture - Held that: - It is not disputed that the imported laptops are subsequently sent to Supreme in their individual packings, ie., in unit containers. It is not the case that the purpose of sending these laptops to Supreme is only for quality control checks, or for that matter, to ensure that the imported laptops are in working condition - the master hard disk drive is totally dismantled and removed from the laptops and various softwares are loaded on them, only after which the HDDs are fixed back into the laptops. All the processes which are involved are repacking of goods in or into the unit container, and in addition relabeling, testing, and loading of software without which the laptops would not be fully functional and would not be accepted by ELCOT. The ingredients of Section 2 (f) (iii) of the Act will definitely get attracted in respect of processes undertaken, hence the impugned activity will definitely fall within the legal definition of manufacture under the said Section 2 (f) (iii) ibid. Confiscation - Penalty - Held that: - the sum of the components of SAD and CVD exceed the duty liability demanded in this case - the ingredients of Section 11 AC will not be attracted in this case, hence, no penalty under that Section can be imposed - penalties set aside - confiscation and redemption fine also set aside. Appeal allowed in part.
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