2004 (11) TMI 137 - AT - Central Excise

Tribunal: Repair of transformers /= manufacturing, no duty liability. Revenue's demand overturned.

The Tribunal ruled in favor of M/s. Accurate Transformers Ltd., stating that repair of transformers does not constitute manufacturing. Therefore, no duty ... Manufacture Issues: Duty liability on bought out items used for repair of transformers.In the appeal filed by M/s. Accurate Transformers Ltd., the main issue was whether they were required to discharge duty liability on the bought-out items used for the repair of transformers. The appellants, who manufacture electric transformers, used components for repair, some with Modvat credit of duty and some without. The Revenue demanded central excise duty, considering the repair activity as manufacturing. The Deputy Commissioner and Commissioner (Appeals) upheld the duty payment based on previous decisions. However, the appellants argued that repair did not amount to manufacturing, and duty was not payable on components without Modvat credit. The Tribunal agreed with the appellants, emphasizing that repair did not constitute manufacturing, thus no duty was payable on repaired transformers. Citing a Supreme Court case, the Tribunal ruled in favor of the appellants, setting aside the impugned order and allowing the appeal.