<h1>Electric Motor Modifications Not Manufacturing, CENVAT Credit Reversal Upheld; No Penalties Due to Interpretative Issue.</h1> The case involves a manufacturer of electric motors dealing with returned goods. In two instances, motors were returned due to buyer rejection and defects upon export. The company dismantled and modified the returned motors, then cleared them with duty payment. The central issue is whether these modifications constitute manufacturing, which affects the reversal of CENVAT credit. The ruling determined that the modifications do not amount to manufacturing, as no new product was created. Consequently, the company must repay the credit taken, and the differential duty demand is upheld. However, penalties are not imposed due to the interpretative nature of the issue.