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TMI Blog2010 (1) TMI 331X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Hon'ble CESTAT was legally correct in remitting the case to the original adjudicating authority for passing fresh orders regarding party's claim under Rule 173L for which the competent authority is Assistant Commissioner/Deputy Commissioner having jurisdiction over the factory?" 2. M/s. Maruti Udyog Ltd. (hereinafter referred to as the respondents) is engaged in the manufacture of motor vehicles falling under Chapter 87 of First Schedule to Central Excise Tariff Act, 1985. The vehicles are cleared for home consumption on payment of appropriate duty of excise. The vehicles are also cleared for export under bond. 3. Some times, after clearance of the vehicles from the factory but before the vehicles reach the destination viz. dealer's premises or port through which export is to be made, transit damages occur to the vehicle. Various reasons due to which vehicles got damaged in transit are collusion of truck/trailers carrying vehicles with other vehicles, over turn of truck/ trailers, truck/trailers carrying vehicles hitting bush of trees etc. If damages/defects found are repairable at the dealer's end, the same are not returned to the respondents factory but are repaired by de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess of repair undertaken by respondents amounts to manufacture. These Show Cause Notices pertained to the period April, 1997 to March, 2002 and demanded duty of Rs. 14,68,10,887/- from respondents after allowing adjustment of Rs. 2,98,15,214/- to the respondents for duty paid on the body shells. These show cause notices also proposed for recovery of interest & imposition of penalty on the respondents. 8. The Commissioner of Central Excise vide Order-in-Originals dated 28-7-2001 and 28-9-2001 adjudicated the above show cause notices (except for Show Cause Notices dated 8-3-2002 and 29-7-2002 and these Show Cause Notices were adjudicated later on). Ld. Commissioner confirmed duty demands of Rs. 14,02,67,876/- against the respondents and also imposed penalty of Rs. 1,90,00,000/-. 9. On appeal, the CESTAT remanded the matter vide Final Order dated 12th August, 2002. In the remand proceedings, Commissioner of Central Excise passed impugned order dated 24th February, 2004 vide which he confirmed duty demand of Rs. 12,41,59,647/- against the respondents after reducing Rs. 3,03,69,755/- being duty paid on body shells and Rs. 1,40,90,087/- being modvat credit available on inputs used for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f a lower authority. 7. With regard to the demand in respect of goods cleared originally for export, the demand has been made without taking into consideration the provisions of Rule 173M. During the hearing of the case, the learned Counsel has pointed out that in respect of some of the goods covered by other show cause notices involved in the impugned proceedings themselves, no demand had been made in respect of such goods. This demand on this account, therefore, is clearly not maintainable. There is no allegation that the assessee had not brought back to the factory, the cars cleared for export and such return is covered by Rule 173M. The assessee has also accounted for the cars so returned. Therefore, the provisions of Rule 173M are intended clearly to cover situations like the present appellants. Therefore, this demand is not maintainable. 8. With regard to the third demand in respect of 169 cars also, the duty demand is clearly unwarranted. Rule 49 makes it clear that duty is chargeable only on the removal of the goods from the factory or approved place of storage. Rule therefore, permits the manufacturer to carry out whatever processes are required to make the goods marketa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earing the repaired vehicles without payment of excise duty. CESTAT vide Final Order dated 12th August, 2002 held that the process of repair undertaken by the respondents amount to manufacture and that instead of Rule 173H, Rule 173L was applicable to the case of respondents. The respondents submit that even if the activities of repair undertaken by them amounts to manufacture, under Rule 173L also, they would be entitled for refund of duty paid which would be more or less equal to duty payable on the clearance of repaired vehicles. It is also submitted that once the activities of repair undertaken amount to manufacture, the respondents would also become entitled for credit of duty paid on body shells as also credit reversed on parts, used for repairing. Thus, it is submitted that on an overall basis, under Rule 173H, the Respondents have paid excise duty much higher than duty that would have been payable if they would have followed procedure under Rule 173L. 14. The Tribunal has applied its mind and after proper appreciation of facts has held that no duty can be demanded in respect of repaired vehicles that were exported as also internally damaged vehicles that were cleared on pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder, taking into account the claim of respondents under Rule 173L with regard to cars cleared for home consumption but brought back to the factory because of irreparable damage is legally correct and justified as a higher authority can always assume the jurisdiction of the lower authority. Hence no question of law arises in the present case as the Tribunal has only remanded back. 18. Regarding the second question as raised in the present appeal, the Tribunal in the impugned order has held as under :- 7. With regard to the demand in respect of goods cleared originally for export, the demand has been made without taking into consideration the provisions of Rule 173M. During the hearing of the case, the learned Counsel has pointed out that in respect of some of the goods covered by other show cause notices involved in the impugned proceedings themselves, no demand had been made in respect of such goods. This demand on this account therefore, is clearly not maintainable. There is no allegation that the assessee had not brought back to the factory, the cars cleared for export and such return is covered by Rule 173M. The assessee has also accounted for the cars so returned. Therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X
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