TaxTMI 
TaxTMI 
1997 (4) TMI 222
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....rganic surface active products and preparations for use as soap in the form of cakes and surface active preparations like powder falling under sub-heading No. 3420.20 and 3420.90. According to the appellants sometimes the cakes/powders get damaged in transit and the wrappers in which they are packed also get deteriorated and such goods are received back from their dealers. The appellants received them back in terms of Rule 173H for repair and reconditioning of cakes and changing of wrappers. In the case of powder only wrappers are changed. In the case of other goods repairs are accounted for in Form V prescribed by the Collector of Central Excise, Meerut. Information in Form D-3 was also regularly submitted to jurisdictional Supdt. on recei....
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....d the demand for duty was not justified. 6. Ld. JDR drew attention to the observations of the Assistant Collector in the order-in-original. In the finding part of the order of the Assistant Collector the Assistant Collector had gone into the process involved in the so called repair carried out by the appellants. He had quoted the written submissions by the appellants in which the appellants had stated "to remove the defects the detergent cakes are first broken into pieces and some raw-material added into it and the further process to form cake again is the same as for cakes manufactured afresh". As regards wrappers the Assistant Collector had found that detergent cakes and powder were being supplied in cartons and it was not possibl....
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....emorandum of Appeal appellants have explained the details of the process engaged in by them. They have explained that where soap cakes are damaged the same are broken into smaller pieces to facilitate feeding into the machines and for making good the weight of the soap that was lost in transit some quantities of raw-material are added along with the requisite quantity of water. Then the soap cakes are wrapped and put into card boxes. Since the substances for making soap in the shape of cakes as made from broken and damaged pieces of soap, according to the appellants, the process would qualify for being covered under Rule 173H. They have also referred to case law on the meaning of `manufacture'. Decided cases have settled the point that manu....
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....ch have lost shape during transit had to be broken into smaller pieces for facilitating feeding into the machine and for making good the weight of the soap a certain quantity of raw-material along with water had to be added. Whether it amounts to manufacture of a new item or it is something less to qualify for the benefit of Rule 173H is the point at issue. Though the raw-material used in remaking the damaged detergent cakes may be the same as in the case of the original soap manufacture, there is a certain addition to compensate for the loss incurred in transit such as addition of certain raw-material and a certain quantity of water apart from breaking the damaged soap cakes into smaller pieces for facilitating feeding into the machines. T....