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2016 (9) TMI 938 - CESTAT NEW DELHI

2016 (9) TMI 938 - CESTAT NEW DELHI - 2016 (342) E.L.T. 385 (Tri. - Del.) - Manufacture - Whether the process of fitting electric motors to imported sewing machines amounts to manufacture within the meaning of 2 (f) of the Central Excise Act 1944 read with section note 6 to section XVI of the Central Excise Tariff Act and if the process amounts to manufacture, whether the resultant sewing machines are eligible for exemption under serial No. 201 and of notification No. 6/2002 - Held that:- what h .....

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ent of Central Excise Duty arises in this case. Even if a view is taken that addition of motor results in a complete article liable for payment of excise duty, we find that it will be covered by the exemption given in serial No. 201 of notification 6/2000-CE. - The exemption is available to those sewing machines which do not have an inbuilt motor. The concept of what constitutes a sewing machine with inbuilt motor has been examined by the Tribunals in many cases referred to the case of Gabba .....

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confirmed that duty demand to the extent of ₹ 45.62 lakhs. He also ordered recovery of interest as well as penalty equal to the amount of duty confirmed. Further he also ordered confiscation of the goods seized totally valued at about ₹ 10 Lacs with an option to redeem the goods on payment of redemption fine. The order in original in this case was passed by the Addition Commissioner dated 21st of December 2006. 2. The appellant is engaged in trading of various models of Singer brand .....

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e a cavity for fitment of an electric motor which can be connected to the treadle through a V-belt. The machines, as imported also have a facility to connect the belt for manual operation of the machine. The imported machines were extended the benefit of notification under serial No. 201 for CVD purposes. The appellant procured indigenously manufactured motors and fitted them into imported machines and sold them to various customers. After investigation to the affairs of the appellant, the Depar .....

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Additional Commissioner vide his order dated 21st of December 2006 and further upheld in appeal by the impugned order dated 27th of January 2009. Revenue has taken the view that the imported sewing machines are incomplete at the time of import since they are incapable of being operated without fitting an electric motor into the slot provided for it. By fitting an electric motor to such incomplete machine, it brings into existence the complete sewing machine which has been considered to be manuf .....

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note 06, to section XVI, based on which revenue has formed the view of manufacture, is applicable only in respect of conversion of an incomplete or unfinished article into a finished article. The imported machine is capable of operation manually in the form in which it is imported. The fitment of the motor has only made the machine operational through an alternate mode. 4. The appellant has further contended that even if the process of fitting of electric motor to the imported sewing machine am .....

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CC V. Harichand Anand & Co. - 2008 (228) ELT 598 3. Gabbar Engineering Co. V. CCE, Ahmedabad-2009 (244) ELT 552 (Tri.-Ahmd.) 4. CC, Chennai Vs. Hi-tech Machinery 5. We have heard Shri B.L. Narsimhan, Ld. Counsel for the appellants and Sh. G.R. Singh, Ld. DR for the respondent. The following issues arise for consideration in the present appeal:- 1. Whether the process of fitting electric motors to imported sewing machines amounts to manufacture within the meaning of 2 (f) of the Central Excis .....

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Section or Chapter notes of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) as amounting to manufacture; of (iii) Which, in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labelling or re-labelling of containers including t he declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer. The section note 6 to sec .....

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ete or finished article shall amount to manufacture . 6. The adjudicating authority has linked the section note 6 with the section 2 (f) defining the term, manufacture. Chapter Note 6 to Chapter XVI deals with the case of classification of goods which are incomplete or unfinished. The adjudicating authority has taken the view that the sewing machine in the form in which it is imported is an incomplete article which is incapable of being operated without electric motor. Hence he has taken the vie .....

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ufacture implies a change, but every change is not manufacture and yet change of an article is the result of treatment, labour and manipulation. But something is necessary and there must be transformation; a new and different article must emerge having a distinctive name and character or use. 7. In the present case what has been imported is sewing machine even though the motor has not been fitted. After fitment of the motor it remains sewing machine. It cannot be said that the addition of motor .....

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