Find the x that satisfies the following system:
$$x = 3 \mod 2$$
$$x = 3 \mod 5$$
$$x = 3 \mod 7$$
CRT:
$$ M = 2 * 5 * 7 = 70 $$
$$ M1 = 5 * 7 = 35$$
$$ M2 = 2 * 7 = 14$$
$$ M3 = 2 * 5 = 10$$
$$N1 = 1$$
$$N2 = 4$$
$$N3 = 5$$
$$ 3 * 35 * 1 + 3 * 14 * 4 + 3 * 10 * 5 = 423$$
$$ 423 = 3 \mod 70$$
So $ x = 3 $ but this is not true because $3 = 1 \mod 2$ and not $3 = 3 \mod 2$
I am unable to see my mistake, could it be that CRT is not applicable here?
CRT is trivially applicable here. $3\equiv 1 \mod 2$ and $3\equiv 3 \mod 2$ are both true. You are confusing equivalence modulo $n$ with taking a residue modulo $n$.
As a side note, you don't need CRT for things like that. If you have equations $x\equiv n\mod m_i$ for some $m_i$, then trivially $x=n$ satisfies the congruences, even if the assumptions of the CRT are not satisfied.