Manufacture issue and Modvat credit claim were remanded for fresh appellate consideration after a pure legal plea was allowed.

An earlier admission of duty liability did not bar the appellant from raising a pure question of law before the appellate authority on whether altering the capacity and accuracy of imported electronic balances amounted to manufacture. That issue required merits-based examination, which had not been undertaken by the Commissioner (Appeals), so the appellate order was set aside. The matter was remanded for de novo consideration of both the manufacture question and the appellant's claim for adjustment of duty against Modvat credit.

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Issues: Whether the appellant was entitled to raise, before the Commissioner (Appeals), the legal plea that the process of changing the capacity and accuracy of imported electronic balances did not amount to manufacture, and whether the matter required remand for consideration of that plea and of Modvat credit.

Analysis: The appellant's earlier admission of duty liability did not prevent it from raising a pure question of law before the appellate authority. The issue whether the process undertaken amounted to manufacture required adjudication on merits, and the appellate authority had not examined that ground. As the point had not been discussed, the matter also required reconsideration of the appellant's claim to adjustment of duty against Modvat credit.

Conclusion: The appellant was permitted to raise the manufacture issue, the impugned order was set aside, and the matter was remanded to the Commissioner (Appeals) for de novo decision on manufacture and Modvat credit.

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