ORDER
S.L. Peeran, Member (J)
1. This appeal arises from the Order-in-Appeal dated 21-10-1987, by which the Collector (Appeals) has upheld the assessees’ contention that the machine after overhauling and reconditioning continue to have the same identity and function as a plain cigarette machine. During the hearing before the Collector, the assessee had placed besides the evidence on record, another affidavit from Shri Kameshwar Prasad Nautiyal, Design Engineer of the assessee. Among other things the affidavit clarified that whereas a cigarette making machine of mark V Range consisted of over 3000 components, a cigarette making machine M.K. 8 range had over 4000 components. The appellants had further clarified that this process of overhauling, reconditioning and fitment of 5-8-5 kit to the mark V machine, only about 500 to 600 parts are replaced and replacement of so many parts becomes necessary in view of the fact that all the machines in mark V range are over forty years old. In that view, the Collector has concluded that the replacement and renovation of old parts does not amount to manufacture and bringing into existence a new machine. He has also held that the demand is barred by time under Section 11A of the Central Excises and Salt Act, 1944.
2. In this Revenue appeal, it is contended that such renovation will result in emergence of a new machine, and such activity does not amount to renovation as the machine emerges out of the fitment of 5-8-5 kit is not an old machine with a minor gadget attached but totally new product capable of performing improved and different functions and with different characteristics. It is also stated that the assessee had suppressed the facts and hence extended period is invokable.
3. We have heard the learned DR Shri A.K. Agarwal for the Revenue and the learned Advocate, Shri A.K. Jain for the assessee.
4. The learned DR pointed out that the activity of replacement of parts amount to manufacture of a new machine, as the activity of a new machine is different from the old one inasmuch as the new one is capable of manufacturing filter cigarettes, which the earlier machine was not capable. The learned DR points out that against another Order-in-Original, the Collector had dismissed the assessees appeal.
5. The learned Advocate files written brief and also relies on the Collector’s finding based on the affidavit of the Design Engineer filed before the Collector (Appeals) and submits that it is a case of some replacement of worn out 500 to 600 parts and the machine consisted of over 3000 components and the replacement of 500 to 600 parts does not amount to manufacture bringing into existence a new commodity. The learned Advocate filed a list of merely 28 authorities in support of his contention that reconditioning/renovation does not amount to manufacture. In the list of citations, we note 3 Supreme Court’s Judgments as noted under:-
1. P.C. Cherigan v. Barfi Devi 1979 (4) E.L.T. (J 593) (S.C.) wherein the Hon’ble Supreme Court has held that retreading of old tyres (complete transformation is a must for manufacture) does not amount to manufacture of a new commodity.
2. Allenburry Engineers Pvt. Ltd. v. Rama Krishna Dalmia and Ors. 1973 (2) SCR 257 Reconditioning and repairing of old vehicles do not amount to manufacture.
3. Lathia Industrial Suppliers Co. Pvt. Ltd. v. Collector of Central Excise 1987 (29) E.L.T. 751 (S.C.) Re-rubberising and relining of old and used rollers, does not amount to manufacture.
6. The learned Advocate also files a list of authorities in support of his contention that larger period cannot be invoked. He files a copy of Final Order No. 151-153/95-A, dated 29-12-1995 in their own case, wherein the Tribunal has allowed their appeal on time bar. The learned Advocate points out that this is an appeal which the learned DR referred to in his argument.
7. The learned Advocate also relies on the judgment rendered in the case of Commissioner of Income-Tax v. Mahalakshmi Textiles Mills Ltd. as reported in 1967 (66) ITR 710, wherein the Hon’ble Supreme Court held that even addition of new parts to bring an improvement in the machinery would not result in the manufacture of a new commodity. The learned Counsel submits that this judgment is directly applicable to the facts of the present case.
8. We have carefully considered the submissions made by both the sides and have perused the records. We notice that the learned Collector has examined the facts in details and has come to the conclusion that there are only 500 to 600 parts as against 3000 components. He has also noticed that these parts were 40 years old and they had been worned out and required replacement. These replacements and renovation does not amount to manufacture. The Revenues’ contention is that the replacement would bring into existence a new commodity but we do not find any evidence in support of this contention. The reasons being that the Collector had recorded on examining the affidavit and other details that the repairing machinery produced the same cigarette and it continued to produce goods of same identity and the machine functioned as a plain cigarette machine. In view of the detail finding given by the learned Collector on facts, we do not find any infirmity in the order with regard to replacement/renovation of the parts. The learned Counsel has relied on the several judgments and we notice that the view taken by the Apex Court is that repair/re-conditioning/renovation would not amount to manufacture. These judgments would apply to the facts of this case.
9. As regards the plea of limitation raised by the assessee, we notice that the Tribunal has already given its finding in assessees’ favour in the noted order, in the same issue. The findings given by the Tribunal on the limitation issue would be directly applicable to the facts of the present case.
10. In that view of the matter, we do not find any infirmity in the impugned order and hence upholding the same, we dismiss the appeal.