2006 (8) TMI 587 - AT - Central Excise

Summary

Issues:
1. Classification of dumper placer equipment under Chapter Heading 8704 or 8705.
2. Applicability of Notification No. 5/98, 5/99, 6/2000, and 3/2001 regarding duty paid chassis and components.
3. Interpretation of Section Note 4 of Sections XVI for classification of composite machines.
4. Consideration of fresh grounds raised by Revenue in appeal.

Analysis:
1. The first issue involved the correct classification of the dumper placer equipment under Chapter Heading 8704 or 8705. The Tribunal considered the argument that the dumper placer was used for garbage collection, contending it falls under Chapter Heading 8704. However, the Department proposed classification under Chapter Heading 8705. The Tribunal referenced a previous case and held that since the dumper placer did not directly transport garbage but carried containers containing garbage, it should be classified under Chapter Heading 8705. The Tribunal emphasized that the equipment did not directly carry goods but carried containers, leading to the classification decision under Chapter Heading 8705.

2. The second issue focused on the applicability of Notification No. 5/98, 5/99, 6/2000, and 3/2001 concerning duty paid chassis and components. The assessee argued that the dumper placer emerged from duty paid components and should not be considered as goods independently before being placed on the chassis. The Tribunal analyzed the process of fitting the equipment on the chassis and referenced previous decisions to conclude that the specialized equipment did not come into existence separately before assembly on the chassis. As a result, the Tribunal held that no duty could be levied on the composite machine, and the assessee was entitled to exemption under the mentioned Notifications.

3. Regarding the interpretation of Section Note 4 of Sections XVI for the classification of composite machines, the Tribunal clarified that the assembly of parts giving rise to marketable goods amounts to manufacture and attracts duty. However, in this case, the dumper placer equipment did not become independently marketable goods before assembly on the chassis. Therefore, the Tribunal ruled that no duty could be levied on the equipment as it did not meet the criteria for classification under Section Note 4 of the Central Excise Tariff Act 1985.

4. The final issue addressed the consideration of fresh grounds raised by the Revenue in the appeal. The Revenue attempted to introduce new arguments, which the Tribunal rejected, citing a Supreme Court judgment that disallowed fresh grounds not included in the show cause notice. The Tribunal upheld the Commissioner's order, noting that the issue had already been decided in favor of the assessee in a previous case. The Tribunal found no merit in the Revenue's appeal and rejected it, emphasizing the importance of sticking to the issues raised in the original proceedings.