ORDER
U.L. Bhat, J. (President)
1. Order-in-Appeal No. 172/CE/JPR/93/2267, dated 5-10-1993 passed by Collector of Central Excise (Appeals), New Delhi confirming the Order-in-Original No. 35/93, dated 16-7-1993 passed by the Assistant Collector, Jodhpur disposing of the application filed by the appellant under Rule 173H(2) (c) of the Central Excise Rules, 1944 by holding that the process undertaken on old circular saw by brazing new duty paid segments shall amount to manufacture and the assessee shall pay appropriate duty of excise on the circular saws which emerged, is challenged in this appeal.
2. Appellant, engaged in the manufacture of Circular Saws, on occasions receives back old and damaged saws for replacement of damaged “segments” by new segments by adopting certain processes. Accordingly, appellant submitted an application before the proper officer under Rule 173H(2) (c) of the Rules for permission to retain segments manufactured by the appellant for use in the repair of old and defective saws received in the factory. While granting such permission, the Assistant Collector held that the process of replacement of segments is a process of manufacture and therefore, duty would be payable on that basis. It is this part of the conclusion of lower authorities which is being challenged.
3. Appellant manufactures saws and also parts thereof namely, segments. In paragraph 3 of the order passed by Assistant Collector, it is indicated that the old segments are removed by heating with oxyacetelene flame and thereafter surface is grounded and flux is applied on the ground surface and thereafter the new segment is “brazed” on the old saw. In other words, the repair effected by the appellant consists of replacing the worn out segment with a new segment. No doubt, at the stage of replacing the old segment by new segment, the process followed at the stage of manufacture would have to be followed. Would that be sufficient to regard it as an activity of manufacture as a result of which a new excisable product comes into existence?
4. There is no doubt that mere repairing and reconditioning or upgrading of old machine would not amount to manufacture. This is seen from the decisions in Shriram Refrigeration Industries Ltd. v. CCE, Hyderabad – 1986 (26) E.L.T. 353 (T), Fordham Pressings (India) Pvt. Ltd. v. CCE -1993 (66) E.L.T. 277 (T) and Enfield India Ltd. v. CCE, Madras -1996 (88) E.L.T. 773 (T). A segment is only a part, may be an important part of the circular saw. When an old circular saw with a damaged or worn out segment is repaired by removing the worn out segment and replacing it with a new segment, it cannot be stated that a new circular saw comes into existence; No new product comes into existence. What is seen at the end of the process of repair is the old saw with a new segment. The fact that in replacing the new segment, some process involved in the manufacture of the original circular saw has to be adopted, would not alter the situation. The entire activity is only an activity of repairing an old worn out circular saw. The activity does not lead to manufacture of new excisable product. Therefore, the direction given by Assistant Collector that since the process amounts to manufacture appellant shall pay appropriate duty of excise on the circular saws allegedly emerging, is not sustainable and is set aside. The appeal is accordingly allowed.