Electric motor coil processes not manufacturing, no excise duty. Appellants relieved from duty liability.

The Tribunal held that the processes carried out by the appellants on electric motor coils, including cutting strips and shaping coils, did not amount to manufacturing. The appeal challenged the imposition of excise duty by the Collector, who considered replacing and repairing electric motors as manufacturing activities. The Tribunal disagreed, finding that the operations were service-oriented and did not result in marketable goods. As a result, the appellants were relieved of excise duty liability on the processes conducted on the coils.

---

---

Issues:
1. Whether the process of rewinding or repairing and servicing of electric motors amounts to manufacture for the purpose of excise duty liability.
2. Whether the replacement and repairing of electric motors by the appellants constitute manufacture necessitating excise duty payment.
3. Whether the specific operations carried out on coils by the appellants amount to manufacturing activity.
4. Whether the goods emerging from the process are marketable as such.
5. Whether the appellants are liable to pay excise duty on the processes carried out on the coils.

Analysis:

1. The appeal challenged the Order-in-Original by the Collector of Central Excise, Pune, which held that while most functions performed by the appellants did not amount to manufacture, replacing and repairing electric motors did. The Collector confirmed duty on coils and imposed a penalty. The appellants argued that they do not manufacture coils but replace damaged parts during rewinding. They contended that the specific operations were to fit coils onto motors, making them non-marketable as standalone goods.

2. The appellants' advocate highlighted that the coils were not manufactured but modified to fit motors, citing previous judgments in their favor. They emphasized that the coils' size and shape were specific to each motor, indicating a service nature rather than manufacturing. The Manager's affidavit supported this claim, stating the operations did not constitute manufacturing. The Department reiterated its stance, noting that ready-to-use coils were not available off the shelf.

3. The Tribunal noted that the operations on the coils were specific to fitting them into motors and did not transform them into a different commodity. Insulation and cutting into smaller sizes were deemed service-oriented rather than manufacturing. The goods were considered non-marketable in their processed form, supporting the appellants' argument.

4. Ultimately, the Tribunal held that the processes carried out by the appellants, such as cutting strips and shaping coils, did not amount to manufacturing. Citing precedents and considering the nature of the operations, the impugned order was set aside, and the appeal was allowed. The Tribunal concluded that the activities were service-oriented rather than manufacturing, relieving the appellants of excise duty liability on the processes conducted on the coils.

---