2008 (10) TMI 143

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.... E/68/2005 89/2007-C.E. dated 30-10-2007 Rs 1,60,000/- u/s 11AC and Rs. 5,000/- under Rule 25 2.   E/1020/2005 91/2005-C.E. dated 12-9-2005 Rs. 6,28,850/- u/s 11B 2. Mr. Rajesh C. Kumar, the learned Advocate appeared on behalf of the appellant and Ms. Joy Kumari Chander, learned JCDR, for the Revenue. 3. We heard both sides. 4. The issue is like this. The appellants are manufacturers of Electric Motor. In the present cases the issue involves the return of the motors cleared. In one case the motor was cleared on payment of duty. Somehow, it was not accepted by the buyer. Therefore, the goods had to be returned under Rule 16 of the Central Excise Rules. The appellants took credit on the returned goods. But ....

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....ught to the factory. —(1) Where any goods on which duty had been paid at the time of removal thereof are brought to any factory for being re-made, refined, re-conditioned or for any other reason, the assessee shall state the particulars of such receipt in his records and shall be entitled to take Cenvat credit of the duty paid as if such goods are received as inputs under the Cenvat Credit Rules, 2002 and utilize this credit according to the said rules. (2) If the process to which the goods are subjected before being removed does not amount to manufacture, the manufacturer shall, pay an amount equal to the CENVAT credit taken under sub-rule (1) and in any other case the manufacturer shall pay duty on goods received under sub-rule (I) a....

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.... the Commissioner (Appeals) in one of the impugned orders has given the following reasoning for holding that the process carried out by them does not amount to manufacture. 6.1 Findings rendered in Order-in-Appeal No. 91/2005-C.E. dated 12-9-2005, is reproduced herein below: "2. The issue to be decided in this case is whether the operations carried on the defective machine to make it operational and marketable amounts to manufacture. I find that the machine, viz, Electric Generator was re-imported by the appellant as it developed problem due to design defect. The machine was subjected to following operations at appellants factory, namely: disassembly, boy modification, surface grinding, providing additional steel stiffeners, re-positi....