TMI Blog2017 (7) TMI 897X X X X Extracts X X X X X X X X Extracts X X X X ..... ment that the appellant had earlier manufactured and sold such component washing machines or for that matter, whether the said item found in the premises being utilized in the regular manufacturing operations. The averment of the appellant that it was only a prototype under development has also not been adequately countered by any of the lower authorities. It would not be just and fair to tax the appellant for an attempt at innovation, especially when that attempt was still in process and had not culminated in manufacture of a complete and fully functional machine. Appeal allowed - decided in favor of appellant. - Appeal No. E/802/2007 - Final Order No. 41256 / 2017 - Dated:- 25-7-2017 - Ms. Sulekha Beevi C.S. Member (Judicial) And ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturned to them whereas the same was found to be remained in the said additional premises. Subsequently, the component washing machine, fabricated structures as also goods covered by challan No. 11346 dated 1.8.2000 and 13927 dated 28.8.2000 were placed under the seizure on 2.2.2001. A show cause notice dt. 23.1.2002 was issued to the appellant proposing disallowance of cenvat credit of ₹ 36,077/-, demand of differential duty Excise duty of ₹ 62,100/- on component washing machine along with interest thereon, confiscation of the goods seized and imposition of penalties under various provisions of Central Excise law. 2. In adjudication, original authority vide an order dt. 31.01.2007 confirmed the above proposals, confiscated t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 173B of erstwhile Central Excise Rules, 1944 for the manufacture of component washing machine. (ii) Regarding allegation that appellant had diverted the machine tools on which they had availed modvat credit for use solely in manufacture of wholly exempted goods, appellant was actually carrying out drilling, tapping, grinding etc. operations for their components required for making their final product at the newly added premises. No evidence has been placed on record to show that appellant used modvated capital goods solely for purposes of manufacture of wholly exempted goods. (iii) With regard to component washing machine, appellant had filed declaration on 09.01.2001 under Rule 173B informing about manufacture of said machi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for completion of the said washing machine. The demand is raised based on the valuation made in the detention mahazar which is right and proper. Therefore demand raised on the ground that capital goods machine tools had been diverted to adjacent premises and solely used for the manufacture of exempted goods is correct and proper. So also the demand raised on component washing machine and other capital goods stools, racks, tray stands etc. is also sustainable. (iii) The challans relating to goods received from the job worker bore entries for return of the same on 29.08.2000. However, the same machineries were found lying in the premises in full operation during the time of visit of department officers. (iv) With regard to content ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... more than ₹ 44,073/-. However, these averments of the appellants have neither been adequately considered nor have been suitably rebutted by lower authorities. It is seen that on the matter of component washing machine, the appellant has been crying hoarse right from the initial adjudication proceedings that the said item was a new concept conceived and developed by them, that the same was under development, the design of the same was not yet frozen and therefore said machine was not a completely manufactured machine. We find merit in this contention. There is no allegation by department that the appellant had earlier manufactured and sold such component washing machines or for that matter, whether the said item found in the premises ..... X X X X Extracts X X X X X X X X Extracts X X X X
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