- (1.) The question raised for our consideration in these appeals is whether while repairing the defective compressors any part such as stators replaced by the appellant involves manufacturing activity attracting duty under the Central Excise Act. The appellant in the process of repairing scraps some components which cannot be repaired and one such component is stator. The stators were earlier manufactured in the factory of the appellants for repairing of the compressors. Later, the materials required for replacing the scrapped components are received on payment of duty from the factory of the appellant. The Service Centre sends these materials to outside job workers for making the stators. Thereafter the appellant undertook the shaping, varnishing and baking of such stator to fit such stators into the compressor housing. The Collector having felt that the activity of shaping, varnishing and baking done by the appellant on receipt of the stator from the job workers results in manufacture and initiated proceedings for adjudication of tax.
(2.) The appellant contended that the job workers are manufacturers of stators and not the appellant as stators are received from the job workers in complete technically functional state. The activities undertaken by the appellants are only to use the stator and not manufacture the stators. The appellants also challenged the invocation of the longer period of limitation, which was available to the appellants only in case of suppression of fraud, coalition or wilful statement or contravention of rules to the payment of duty.
(3.) The Adjudicating Authority held that the job workers is the manufacturer of the stator and not the appellants and that the extended period of limitation cannot be invoked. On appeal to the Appellate Tribunal, it was held that the appellants are manufacturers of the stators and not the job workers because they undertook the process of shaping, varnishing and baking and then only the marketable goods came into existence and it also held that the extended period of limitation was invokable. Hence this appeal.;