2014 (3) TMI 830

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..... uired to be gifted by them. Some bulk orders are placed by them with the companies. The watches purchased by the client in bulk are sent back to the appellants for dial printing and in some cases for change of strap. As such procedure under Rule 57H of the erstwhile Central Excise Rules, 1944 was being followed by the appellants. 2. The appellant was served with the show cause notice dated 8-1-1997 proposing demand of duty of Rs. 8,56,417/- on the ground that by undertaking the dial printing and change of strap on the already duty paid watches, they have undertaken the manufacture of new watches. As such, provisions of erstwhile Central Excise Rules, 173H were not applicable to them and they should have cleared new watches on payment .....

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..... , they were subjected to dismantling and dis-assembly i.e. their parts and components were used to be separated thus the watches were no more watches and were reduced to dials, hands, straps, needles and so on. After re-printing on the dials, change of monograms, changing old parts, change of hands, straps, change of name etc., various parts and components were put together i.e. assembled to manufacture the watch. Besides original parts were mixed with the new parts and after fresh assembly hands, straps may not go in those original watches and such re-assembly amounts to manufacture. These watches now emerged in the form of new watches bearing different name and character and had a new attractive form capable of attracting more price/value .....

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..... E.L.T. 481 (Tri.-Mum.)] wherein the law declared by various precedent decision of the Tribunal as also by the Courts was considered. It was held that replacing the engine and/or alternator in the old DG sets with the new engine/alternator does not amount to manufacture inasmuch as the same does not result in production of a new article. Reference was also made to the Tribunal's decision in the case of C.C.E., Meerut v. Samtel Colour Lab. [2001 (135) E.L.T. 288 (Tri.-Del.)] wherein on the issue of intermixing of identical parts taking place between old and new parts of picture tube was considered. It was observed that at the end, serviceable picture tube emerges in place of defective picture tube and the same cannot be held to be a manufactu .....

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