TaxTMI 
TaxTMI 
2026 (1) TMI 507
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....passed by the Commissioner of Central Excise (Chennai - Audit II). 2. M/s. Herrenknecht India Pvt. Limited (hereinafter referred to as Respondent) is a 100% subsidiary of M/s. Herrenknecht AG, Germany. They are engaged in manufacture and export of Tunnel Boring Machine (TBM) and its parts, drilling system, cutter tools, etc., falling under Central Excise Tariff Heading 84314990. They avail CENVAT Credit on inputs and input services used in the manufacture of their finished products and utilize the same for payment of duty on their finished goods. 3. The Respondent imported two "used tunnel boring machines ex-446" under bill of entry No. 467617 dated 27.03.2010 from HERRENKNECHT Asia Headquarters, Singapore and cleared the same on paym....
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....cess of repair and refurbishment undertaken by the Respondent on the imported used TBMs does not amount to manufacture as, (i) there is no functional difference between the imported machine and the subsequently cleared refurbished machine; and (ii) no new product with distinct character and use emerged out of the said process. Accordingly, Show Cause Notice No. 73/2014 dated 10.09.2014 was issued to the Respondent by the Commissioner of Central Excise-II, Chennai invoking extended time limit as laid down in Section 11A of Central Excise Act, 1994, applicable for recovery of CENVAT credit irregularly taken or utilized wrongly and alleging that (i) the availment of input credit by the Respondent on inputs used fo....
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....t Rules, 2004 read with Section 11 AC of the Central excise Act, 1944. 6. After following due process of adjudication, the Learned Original Adjudicating Authority (hereinafter referred to as LAA) dropped the demand of duty on the grounds of revenue neutrality and limitation. However, while observing that there is merit in the Respondent's contentions that by the declaration of 'deemed manufacture', even carrying out trivial processes have acquired a status of manufacture on account of being marketable, the LAA held that the issue of demand of duty having been decided in favour of the Respondent, any discussion on the issue of whether the activity of the Respondent amounts to 'manufacture' would be superfluous and therefore unnecessary. ....
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....kya Enterprises cited supra held that although the activity undertaken by the appellant therein does not amount to manufacture but when they have cleared their finished product on payment of duty, the same may be treated as reversal of Cenvat credit availed on inputs. However, the departmental appeal against the said decision of the Tribunal has been admitted by the Hon'ble High Court, Bombay, which is pending [2015 (319) E.L.T. A131 (Bom.)]. 8.4 He argued that the decisions relied upon by the LAA pertain to the period prior to introduction of Section 5B of Central Excise Act, 1944 wherein it is clearly stated that if the activity undertaken by the assessee is subsequently declared by the Court as not amounting to manufacture, then Centr....
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....t alleging that the activity undertaken by the Respondent does not amount to manufacture within the meaning of Sec. 2 [f] of the Central Excise Act which resulted in Order-in-Original No. 52/2017 dated 11.05.2017 where the Ld. Commissioner deciding and holding that the said activity amounted to manufacture within the meaning of Sec. 2[f] of the Central Excise Act and on review of the same, the committee of Chief Commissioners concurred with the finding of the Ld. Commissioner and accepted the said order. Therefore, the present appeal should be dismissed in limine as it is not maintainable. 9.2 The Ld. Advocate averred that in another case prior to the passing of the above order dated 11.05.2017, the original authority refused to grant th....
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.... or not. 12. The present appeal has arisen on account of the failure of LAA to conclusively decide the substantive issue of whether the activity of repair and refurbishment undertaken by the Respondent on the imported used TBMs amounts to manufacture even though there is no functional difference between the imported machine and the subsequently cleared refurbished machine and no new product with distinct character and use emerged out of the said process. The LAA has side-stepped the substantive issue by reasoning that having decided the issue of demand of duty in favour of the Respondent, any discussion on the issue of whether the activity of the Respondent amounts to 'manufacture' would be superfluous and therefore unnecessary. 13. H....