- (1.) Heard Sri Prateek Dawar, learned counsel for Revenue and Sri Manu Ghildyal, learned counsel for assessee.
(2.) Following four questions of law have been referred by Tribunal for opinion to this Court pursuant to order dated 8-11-2004 passed in Central Excise Reference Application No. 24 of 2001 :- "1. Whether defective fans received under Rule 173H when scrapped and dismantled and parts thereof stored separately in heaps can be identified as fan? 2. Whether assembly of dismantled parts of fan/new part amounts to manufacture under Section 2(f) of the Central Excise Act, 1944 or not? 3. Whether replacement of defective fan by a new one as admitted by Sh. A.N. Passi, G.M. of the Factory does not establish the fact that the party was evading duty by removing excisable goods in the guise of repaired one? 4. Whether Shri A.N. Passi, General Manger of the factory and Shri Rummy Chhabra, Managing Director of the Co. who were looking after all the activity of the factory were not responsible for omission or Commission of the Act of the Co. when they were fully aware of the activities being undertaken?"
(3.) Learned counsel for Revenue did not dispute that once an item is dismantled and converted into different parts, scraped separately, then identity of dismantled item disappear. It then cannot be identified independently as fan. In the present case it is not disputed that defective fans were received for the purpose of service or repair. They were dismantled and parts were kept in heap. Dismantled parts independently cannot be identified as fan. Hence question - 1 is answered in favour of assessee and against Revenue.;