2002 (6) TMI 93

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....the Appellants, and Shri H.C. Verma, learned Departmental Representative for the Revenue. Learned Consultant submitted that the Appellants manufacture motor vehicle parts; that they conduct endurance tests on some of the goods in their Research and Development Department during which process the goods are destroyed; that these tests are indispensable to render the goods marketable and no Central Excise duty is payable for the removal of goods to R & D Department within the factory. Reliance has been placed on the decision in the case of CCE v. General Cement Products (P) Ltd. - 1989 (39) E.L.T. 689 (T) wherein it has been held that 'unless the goods reach a stage where they are fit for delivery they cannot be considered as fully manufacture....

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....urpose for which they are manufactured. Therefore, quality control test is a must and if the goods are destroyed in the said process, duty of excise is not leviable. The Supreme Court has also dismissed the Civil Appeal No. D-2703 of 2000 filed by the Commissioner against decision in Traco Cable case, supra. Thus following the ratio of the decision of these cases, I set aside the duty demand made in respect of goods cleared for quality control test. 3.1 The learned Consultant also submitted that the Central Excise officers, on their visit on 11-6-98 to the Appellant's factory, found excisable goods short involving duty Rs. 40,836/-; that factually and actually there was no shortage at all; that the said goods were removed from the stores....

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....moved without payment of duty as they were under a bona fide belief that goods being non-marketable, no duty was leviable on them; that the entire duty was paid by them on 11-6-98 even before the issue of show cause notice; that as held by the Tribunal in Amritsar Crown Caps (P) Ltd. v. CCE, Chandigarh, 2002 (140) E.L.T. 437 (T), provisions of both Section 11AC of the Central Excise Act for imposition of penalty and of Section 11AB for charging interest are not attracted; that extended period of limitation is not invokable as they worked under a bona fide belief. He relied upon the decision in the case of Centre for Dev. of Adv. Computing v. CCE, Pune [2002 (141) E.L.T. 6 (S.C.) = 2002 (49) RLT 4 (S.C.)]. 4.2 The learned Departmental Rep....