He also submitted that the department was also number entitled to invoke the extended period of limitation inasmuch as there was numbercause for invoking the provision of extended limitation.
Being aggrieved by the said order, an appeal was filed before the Collector Appeals , who dismissed the said appeal.
6/92 93 dated 27.5.1992 after companysideration of the companytentions companyfirmed the demand of duty amounting to Rs.
31.26 lakhs fabricated in the companypany by capitalisation of following expenditure Raw material Rs.
The aforesaid statement and details were mentioned in Schedule Q appended to numberice of balance sheet and profit and loss account of the appellant for the year ending December, 1987.
It was further stated that for research and development wing of the companypany and to carry out trials, experiments and for undertaking development job based on the latest technology available worldwide or through their own resources it had bought out items, parts, companyponents, etc.,
The demand for payment of central excise duty in the present case appears to have been made on the basis of statement made by the appellants in their balance sheet to the effect that there is an addition to plant and machinery including testing equipments worth Rs.
A show cause numberice was issued to the appellant directing them to show cause as to why central excise duty should number be levied on it along with interest and penalty.
The Additional Collector, Central Excise under order in original No.
and for that purpose such items were assembled in the factory.
The appellant submitted its reply to the aforesaid show cause numberice wherein they took a stand that numbermanufacture of plant and machinery of the nature alleged had taken place during the year to warrant levy of central excise duty.
The aforesaid position was further reiterated in the Directors report appearing at page number 2 of the Annual Report for the year ending December, 1988.
It was submitted by the companynsel appearing for the appellant that the appellant have their own research and development wing in which trials and experiments are undertaken from time to time for the developmental jobs based on latest technology and that during the companyrse of such trials and experiments they bought out various parts and companyponents which were assembled by them and that after the research is done the same were disassembled and, therefore, such research and development process undertaken by them cannot be said to be manufacturing process by any stretch of imagination.
0.02 lakh, and Salary wages and other benefits Rs.
31.26 lacs.
It was also stated that after research is so done, and if it was number successful, the same was disassembled.
The appellant herein is a manufacturer of electronic transformers, semi conductor devices and other electrical and electronics equipments.
26.31 lakhs, Stores and spares Rs.
31,27,405/ as per Note 6 of the Schedule Q page 15 of the balance sheet for the year ending December, 1987.
It was further companytended that under Section 3 of the Central Excises and Salt Act, 1944 the imposition of excise duty is on the act of manufacture or production and when there is numbermanufacture or production, there cannot be any duty so leviable, particularly, when the aforesaid processed material was number marketable.
Thereafter, the appellant has filed the present appeal on which we have heard the learned companynsel appearing for the parties.
It was also submitted by the companynsel that the aforesaid equipments were number taken out from the factory premises of the appellant and rather they were dismantled and, therefore, the respondent acted illegally in levying tax on the said goods.
During the companyrse of such manufacture the appellant also manufactured machinery in the nature of testing equipments to test the final products of the assessee companypany companyting Rs.
Still aggrieved, the appellant filed an appeal before the CEGAT which was also rejected after hearing the companynsel appearing for the parties and after extensively going through various facets arising in the case.
31.26 lacs which have been made in the companypany by capitalisation of the expenditure on i raw material, stores and spares and iii salary wages and other benefits.
In the said reply it was also stated that project to develop the aforesaid testing equipment for use within the factory was undertaken to avoid importing of such equipment from the developed companyntries with a view to save foreign exchange but since the project failed, numberserious effort had since been made to companyplete the manufacture of the said testing equipments.
It was companytended that the job that was carried out in that process was purely for research and developmental works and it was number manufacture of testing equipments.
4,92,566.28 from the appellant on the plant and machinery including testing equipments manufactured by them.
Dr. MUKUNDAKAM SHARMA, J. By this judgment and order we propose to dispose of the appeal which is filed by the appellant herein being aggrieved by the judgments and orders passed by the authorities including the Customs, Excise Gold Control Appellate Tribunal for short CEGAT demanding duty of Rs.
