1987 (3) TMI 224 - AT - Central Excise

Appellate Tribunal rules in favor of M/s. Prestige Engineering India on Central Excise Duty for repaired cops

The Appellate Tribunal CEGAT, New Delhi ruled in favor of M/s. Prestige Engineering India (P) Ltd., allowing them to clear repaired cops without payment ... Manufacture - Repairing of cops does not amount to manufacture hence not leviable to duty Issues: Application for clearance of repaired cops without payment of Central Excise Duty and grant of interim stay of proceedings.Analysis:The judgment by the Appellate Tribunal CEGAT, New Delhi involved an application by M/s. Prestige Engineering India (P) Ltd. seeking permission to clear repaired cops from its factory without payment of Central Excise Duty and requesting an interim stay of proceedings based on a previous order. The applicants contended that the Tribunal's earlier order had been misconstrued by the respondent-Collector and his subordinates. The Tribunal had specifically found that repairing of cops does not amount to manufacture and that the value on account of repairing jobs should be excluded from aggregate clearances. The applicants argued that the Collector was bound by these findings in the re-adjudication process. The respondent-Collector, however, claimed that the Tribunal's decision was not binding in other cases and that the issue of excisability of repaired cops was still open for discussion.The Tribunal considered the effect of its findings on lower authorities in light of a decision by the Madras High Court, emphasizing that the orders of the Tribunal are binding on lower authorities. The Tribunal reiterated its specific finding that no duty could be demanded on repaired cops and clarified that the re-adjudication was to be based on this finding and others. The Tribunal held that the respondent Collector's view that the question of demanding excise duty on repaired cops was still open was incorrect. It emphasized that unless its order was set aside by a competent superior court, the demand for payment of duty on the removal of repaired cops subsequent to the adjudication period was not proper.After clarifying the scope of the re-adjudication proceedings and the effect of its previous order, the Tribunal concluded that no further directions were necessary. The Tribunal agreed with the submissions made by the applicants' advocate that specific directions might not be required if the above aspects were clarified. Consequently, the Tribunal found that the show cause notice calling for payment of duty on repaired cops was also not appropriate in the circumstances.