ORDER
V.K. Agrawal, Member (T)
1. M/s. Siemens Ltd. had cleared two switch boards to Metro Railways Calcutta on 27-9-83 on payment of excise duty. Due to floods, one of the switch board got damaged and was returned to the appellants factory on 28-7-84 for repairs under Rule 173H of the Central Excise Rules. As the department was of the view that process carried out by the appellant amounted to manufacture, they were asked to pay the duty on the entire product at the time of clearance. Subsequently M/s. Siemens Ltd. filed refund application which was rejected by the Assistant Commissioner holding that the assembly of inputs as per drawing into a steel structure panel housing was in the nature of manufacturing activity as defined under Section 2(f) of the Central Excise Act. The Commissioner (Appeals) upheld the order of the Assistant Commissioner observing that using the old structure M/s. Siemens had replaced the entire damaged inputs by assembling of completely new inputs which tantamounts to new structure under Section 2(f) of the Central Excise Act.
2. The appellants have contended that after completion of the repairs, the goods did not change the form and they remained switch boards only; that under Rule 173H manufacturer can bring into factory the duty paid goods among other things for the purpose of remaking, refining, reconditioning, repairing or subjected to any similar process; that the switch board was subjected to these processes only.
3. Shri H.K. Motwani, General Manager, who appeared for hearing, contended that after completion of repair, the goods did not change the form and they remained boards; that the old frame was replaced and it amounted for one-third of the value of the boards. He relied upon the following decisions :-
(1) Shriram Refrigeration Industries Ltd. v. CCE -1986 (26) E.L.T. 353 (Tribunal) (2) CCE v. Fordham Pressings (India) Pvt. Ltd. - 1989 (42) E.L.T. 721 (Tribunal) (3) Metro Tyres Ltd. v. CCE - 1996 (84) E.L.T. 485 (Tribunal) (4) Enfield India Ltd. v. CCE - 1996 (88) E.L.T. 773 (Tribunal) (5) Re : Electric Equipment Factory - 1982 (10) E.L.T. 794 (G.O.I.) 4. The learned JDR Shri S. Nunthuk argued that all the inputs of the switch boards were changed and accordingly a new product emerged which situation is not covered by Rule 173H of the Central Excise Rules.
5. We have examined the issue. Rule 173H provides that the assessee may bring into the factory the goods for inter alia, being refined, reconditioned repaired or subjected to any similar process in the factory. The appellants have brought in damaged switch board for repair and in the process of repair all the inputs were changed. They had, however, used the old steel structure of the board. This fact has not been disputed by the department. In view of this it cannot be said that the appellants had manufactured a new switch board. This question was considered by the Tribunal in the case of Shriram Refrigeration Industries Ltd., (supra), in which it was held that so long as the process applied was only that of reconditioning even inclusive of addition of new parts, the benefit of duty free removal under Rule 173H would be available. Similarly in the case of Modi Zerox Ltd. v. CCE, Meerut -1997 (91) E.L.T. 116 (T), it was held that change of certain parts or recoating of a drum or a vessel removing the old coating does not amount to manufacture. In the instant case the appellants have paid the duty on the parts which were utilised in the repairs of the switch board. They are not required to pay the duty on the entire value of the switch board. Accordingly, the appeal filed by M/s. Siemens Ltd. is allowed with consequential relief.