SUDHIR ENGINEERING COMPANY Vs. CCE

JUDGEMENT

(1.) THE brief facts of the case are as under:

(2.) THE appellants are engaged in the manufacture of Diesel Generating Sets classifiable under Chapter No. 85 of the Central Excise Tariff Act, 1985. The appellant's factory was visited by the Preventive Officers of Central Excise, on 28.1.1991, who conducted various checks and verifications and recorded the statements of the authorized representatives of the appellants. During the course of checks, it transpired that the appellant had received certain DG Sets for repairs, reconditioning and/or for remaking, etc., which were originally cleared by them on payment of duty from their factory. The officers found that in some of the DG Sets either the engine or alternator or both were replaced with new engines or alternators. As such, they entertained a view that such replacement of the old engine/alternator with a new engine amounts to 'manufacture' and the applicants were required to pay duty on the same.

(3.) ON adjudication, the Commissioner, vide his impugned order confirmed demand of duty of Rs. 1,83,452/ - in respect of 6 DG Sets; of Rs. 19,03,261/ - in respect of 35 DG Sets and also denied the modvat credit of Rs. 1,35,183/ - in respect of 3 DG Sets. He also imposed personal penalty of Rs. 22,21,936/ - on the manufacture unit M/s. Sudhir Engineering Company, along with imposition of personal penalty of Rs. 5 lakhs on Shri Sudhir Seth, Partner of the manufacture unit. The above order of the Commissioner is impugned before us.