TaxTMI 
TaxTMI 
1999 (6) TMI 253
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.... briefly stated are that the appellants manufacture electrical transformers. The appellants had been receiving back the defective electrical transformers into the factory for repair within and beyond warranty/guarantee period under Rule 173H. During the course of P.B.C. checks of various forms maintained by the appellants under Rule 173H, it was observed that during the period 1-6-1989 to 25-11-1992, the appellants had availed Modvat credit on the inputs which were used for repairs by the defective transformers received back by them for repair without reversing Modvat credit and clearing such repaired transformers without payment of duty. The entries in Form-V register were kept blank. Separate accounts were not maintained showing the quant....
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....filed; that the contract price was inclusive of spare parts for free rectification during warranty period; that the appellants have been pleading that no duty was payable on the repaired transformers or components used for repairs; that the credit was not reversable inasmuch as the duty was paid on higher value taking into account such repairs/replacement; that this issue was raised by the department on many occasions; that the SCN dated 19-12-1980 under Rule 56A was discharged without any further proceedings; that the SCN dated 16-11-1987 based on CERA audit during the period 22-7-1987 to 29-7-1987 was not proceeded with; that the SCN dated 20-5-1993 for the period 26-11-1993 to 30-4-1994 and the SCN dated 4-11-1993 for the period 3-5-1993....
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.... Shri Satnam Singh, ld. SDR submits that there was no provision in the Central Excise Rules which provided that the duty paid inputs can be used for repairs of defective transformers within warranty period or beyond, that repairing transformers does not amount to manufacture; that when there is no manufacture of finished excisable goods, Modvat credit under Rule 57A cannot be availed; that there was no force in the arguments of the appellants that Part II price list showed that the assessable value was on the higher side and it included the cost of repair; that no evidence was brought on record to prove how much excess price was charged or indicated in the Part II of the price list; that even if this contention of the appellants was co....
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....ty on the inputs used in the repairs of transformers should have been reversed as no duty was paid on the transformers and the activity of repair did not amount to manufacture. We note that there is a Form-V register meant for the purpose. Entries in Form-V were kept blank. Form-V register did not indicate that the transformer after repair was being cleared without payment of duty nor did it indicate the quantum of inputs and Modvat credit thereon used in the repair of transformer. The appellants contended that they had submitted part II price list; that assessable value shown was much higher than the actual value of the transformers inasmsuch as the value charged was inclusive of warranty repair etc. However though this contention was made....