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2015 (11) TMI 813 - CESTAT NEW DELHI

2015 (11) TMI 813 - CESTAT NEW DELHI - 2016 (333) E.L.T. 356 (Tri. - Del.) - Import of goods at concessional rate of duty under Notification No. 25/99-Cus for use in manufacture of goods - Duty demand u/s 28 - Penalty u/s 114A - Demand of differential duty - Held that:- It is seen that the appellant was receiving defective CPTs under Rule 16 of the Central Excise Rules - appellant was fully aware that the repair activity undertaken by it did not amount to manufacture and therefore the goods used .....

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so aware that the goods imported at concessional rate of duty were to be used only for manufacture of excisable goods and still it used those goods for repair. Not only that when information was sought, it indulged in prevarication. - processes undertaken clearly supported the conclusion that they amounted to manufacture while in its own case, CESTAT had given a finding that repair of CPTs did not amount to manufacture. - No infirmity in the impugned order - Decided against assessee. - Appeal No .....

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he Customs Act, 1962. 2. The facts of the case are as under: 3. The appellant a manufacture of colour picture tubes (CPTs) also used to receive old CPT under Rule 16 of the Central Excise Rules, 2002 and repaired the same. It was importing certain goods under the benefit of exemption under Notification No. 25/1999-Cus. dated 28.2.1999. The said notification provided for concessional rate of Customs duty on goods specified therein when imported into India provided those goods were used for the ma .....

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did not cooperate in providing information sought by Revenue in this regard. For that reason the Commissioner confirmed impugned differential duty along with interest and penalty. 3. The appellant has contended that: (i) Way back 2001 it declared that it was received defective CPTs in its factory for repairs. (ii) A defective CPTs underwent processes which amounted to manufacture. It cited the CESTAT judgment in case of CCE, Ahmedabad Vs. Tudor (I) Ltd. 2006 (197) ELT 53. (iii) The repaired CPT .....

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r of CPTs did not amount to manufacture and the appellant was guilty of suppression/mis-statement as has been brought out in the impugned order. 5. We have considered the contentions of both sides. It is seen that the appellant was receiving defective CPTs under Rule 16 of the Central Excise Rules. The said rule is reproduced below: RULE 16. duty on goods brought to the factory. "(1) Where any goods on which duty had been paid at the time of removal thereof are brought to any factory for be .....

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nder sub-rule (1) and in any other case the manufacturer shall pay duty on goods received under sub-rule (1) at the rate applicable on the date of removal and on the value determined under sub-section (2) of section 3 or section 4 or section 4A of the Act, as the case may be. [Explanation. The amount paid under this sub-rule shall be allowed as CENVAT credit as if it was a duty paid by the manufacturer who removes the goods.] (3) If there is any difficulty in following the provisions of sub-rule .....

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of their earlier clearance from their factory. The crucial issue in this case is whether repair of CPTs amounted to manufacture. We find that in appellants own case, 2004(172) ELT 236 (Tri.-Del.), CESTAT (in paras 7 & 8) held that the activity of repair of CPT undertaken by the appellant did not amount to manufacture. Paras 7 & 8 of the said CESTAT judgement are reproduced below: 7. Yet another document relied on by the Commissioner is a letter dated 28-7-1998 of M/s. Texla Electronics L .....

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ppellants replaced 71 CPTs, In respect of the above mentioned 71 CPTs appellant had paid central excise duty and interest under intimation to the Superintendent, Central Excise Range before issue of show cause notice. This is the only goods where insurance claim had been made. 8. It is also contended by the appellant that the fact that they had reversed Modvat credit to the extent of ₹ 3,40,398/- on components like Magnet, Compation Plate, Sonibond, Rubber Wedge, etc. used in repairs of su .....

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IS reports by the Commissioner is unjustified. Month-wise MIS report would show the figures of mount yield varying from 80% to 85%. In the affidavit filed by Shri D.C. Tripathi, Vice President (Works) he explained the different circumstances under which loss of electron gun comes about in the manufacturing process. Reliance is also placed by the Learned Counsel for the appellant on the Hand Book of Procedure of Standard Input-Output Norms fixed by DGFT (Ministry of Commerce) under the EXIM Polic .....

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ds used for repair of CPTs were not eligible for the concessional rate of duty under Notification No. 25/1999-Cus. as that exemption was available only for such goods which were used for the manufacture of finished goods. Therefore, demand of differential duty on such goods which were imported at concessional rate of duty under Notification No. 25/99-Cus. and were used for repair of CPTs is clearly sustainable. 6. The appellant has contended that it had informed Revenue wayback in 2001 vide lett .....

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e of duty was applicable to only such goods as were used for manufacture of excisable goods. It was also aware that its repair activity did not amount to manufacture as it was so held by CESTAT in its own case wayback in 2004. In spite of that it used such parts for repairs which clearly shows its intention to evade customs duty by indulging in suppression. Indeed, as has been brought out in the impugned order, when Revenue sought the information regarding use of such goods it indulged in prevar .....

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