TMI Blog2017 (11) TMI 868X X X X Extracts X X X X X X X X Extracts X X X X ..... pretation that such activities does not amount to manufacture - the fact of the purchase order itself specified that no excise duty is required to be paid which further strengthened the assessees believe that their activity does not amount to manufacture. In the absence of any evidence to the contrary reflecting upon the assessee's mala-fides, imposition of penalty upon them is not justified - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d three show cause notices proposing recovery of duty on the ground that the conversion of Rails into Swtiches amounts to manufacture as a separate identifiable item stands emerged. Accordingly, the demands were raised on the fabrication charges, received by the appellant from the Railways by way of issuance of show cause notices, which also proposed imposition of penalties. 3. The said show ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned order, accepted the assessee's request on all other issues and reduced the demand to ₹ 10,32,772/-. He upheld the penalty but reduced the same to ₹ 9,00,448/-. The said penalty was imposed by the original adjudicating authority in terms of the provisions of Rule 25 of Central Excise Rules. 5. After carefully going through the impugned order, we find that the challenge in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue. 6. We also note that there is no evidence of the appellants mala-fide disclosed in the show cause notice and the appellants activities of conversion of Rail into Swtiches and crossing, out of the material supplied by the Railways, is capable of an interpretation that such activities does not amount to manufacture. The penalty stands imposed upon them only on the sole ground that they h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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