1996 (5) TMI 228

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..... higher price by reason of the change of the model. The learned lower authority has held in this connection as under : "The appellants argue that they could have carried out the rectification processes in their own depot. But as things stand, they chose to avail of Rule 173-H procedure and filed D3 intimation to bring back the duty paid goods. As seen from the D3s, pre-authenticated GP1s, the motor cycles are cleared at a higher value is in order. The reliance placed by the apellants on Notification No. 217/86, dated 2-4-1986 is misplaced, since the notification speaks of exemption to modvat items if used within the factory of production or in any other factory of the same manufacturer in the manufacture of finished goods whereas the impug .....

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..... the model a new product has come into existence, and therefore the demand of differential duty is maintainable in law. 4. We have considered the pleas made. We observe that the Central Excise authorities allowed the appellants the facility under Rule 173H. There is nothing in record to show that his facility was wrongly given to the appellants. Under Rule 173H the appellants are permitted to bring in the goods which need to be re-made, refined, re-conditioned, repair or subjected to any similar processes in the factory. In the present case the appellants obviously has done some modifications of the machine resulting in the change of the model. The goods which emerged as a result of the processes carried out continue to remain motor b .....

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..... treated as a new manufacture. This is not the position under Rule 173H. As it is the authorities are demanding differential duty attributable to the value addition as a result of the processes carried out not on the full value of the goods which were brought into the factory. In case the goods have been treated as new manufacture then duty should have been demanded on the full value of the goods as cleared from the factory. This not having been done we hold that the authorities themselves are not treating the product emerging in the hands of the appellants as fresh manufactured goods. In that view of the matter we hold that the demand as raised is not sustainable in law and therefore we allow the appeal.
Case laws, Decisions, Judgement .....

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