Repairing old batteries not manufacturing for excise duty. Penalty set aside. Appeal allowed on merits and limitation.

The Tribunal held that the repairing/re-conditioning activities for old storage batteries did not amount to manufacturing attracting central excise duty. The demand of duty and personal penalty imposed on the appellant were set aside as the activities did not align with the definition of manufacturing under the Central Excise Act. Additionally, the extended period of limitation was found inapplicable due to the lack of evidence of suppression of facts by the appellants. The appeal was allowed on both merits and limitation grounds.

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Issues:
1. Whether repairing/re-conditioning of old storage batteries amounts to manufacture attracting central excise duty.
2. Whether the extended period of limitation is applicable due to alleged suppression of facts by the appellants.

Analysis:
1. The issue in this case revolves around whether the repairing/re-conditioning activities undertaken by the appellant for old storage batteries in their factory premises amount to manufacturing, thereby attracting central excise duty. The authorities confirmed a demand of duty and imposed a personal penalty on the appellant based on the premise that such activities constitute manufacture. The appellant argued that they were only replacing problematic parts like the ESB plate and other damaged components, which does not align with the definition of manufacturing under Section 2(f) of the Central Excise Act. They cited precedents where reconditioning activities were not considered manufacturing. The Tribunal noted that even when major parts were replaced, it did not amount to the creation of new goods, as established in various decisions cited.

2. The second issue pertains to the applicability of the extended period of limitation due to alleged suppression of facts by the appellants. The appellant contended that they had consistently informed the central excise authorities about their repairing/re-conditioning activities, submitted necessary returns and maintained registers, demonstrating transparency. They highlighted multiple correspondences with the department where they disclosed their activities. The Revenue argued that the appellant's actions, such as dismantling old batteries and replacing major parts, constituted manufacturing, justifying the longer period of limitation. However, the Tribunal found that the Revenue was aware of the repairing activities, and there was no evidence of mala fide intent to evade duty. Consequently, the demand of duty was deemed barred by limitation, and the appeal was allowed on both merits and limitation grounds.

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