2010 (6) TMI 387 - AT - Central Excise

Skip Loaders classification of the vehicle - specialized equipment did not come into existence as a separate identifiable article, but was born only as a fixture of the specialized vehicle - Commissioner considered the activity taken over by the respondent in detail i.e. the equipment is fabricated and fitted on the chassis and supplied to Municipal Corporation, who use the Skip Loader for collection and carrying city garbage stored in specially designed containers placed on road - no independently marketable goods come into existence - respondent s contention that the vehicle classifiable under Chapter heading 87.04, that contention was rejected holding that collection of garbage cannot be treated as transport of goods and classifiable the Dumper Placer as special purpose vehicle under Chapter Heading 87.05 - assessee was eligible for the benefit of exemption Notification No. 162/86-C.E - respondent eligible or the benefit of the exemption - no infirmity in the order passed by the Commissioner and the same upheld - appeal filed by the Revenue rejected

Summary

Issues: Classification of the vehicle under Chapter Heading 87.05 for exemption eligibility.

Detailed Analysis:

1. Classification of the Vehicle:
The case involved a dispute regarding the classification of a vehicle manufactured by the respondents under Chapter Heading 87.05 of the Central Excise Tariff Act, 1985, for exemption eligibility. The officers of DGCEI alleged that the respondents were evading Central Excise duty by not complying with the conditions of relevant notifications. The vehicle in question, a Skip Loader, was designed for garbage collection and carrying, falling under the category of special purpose vehicles. The respondents assembled the Skip Loader by fabricating and fitting equipment on duty paid chassis provided by chassis manufacturers. The Commissioner classified the vehicle under Chapter Heading 87.05 and granted exemption benefits as per Notification No. 5/98-C.E., dated 2-6-98.

2. Legal Precedents and Tribunal Decisions:
The Tribunal examined previous judgments to determine the classification of similar vehicles. In the case of Indian Hydraulic Industries (P) Ltd., it was held that specialized equipment, when integral to a vehicle, does not qualify as a separate identifiable article for excise duty purposes. Additionally, in the case of Maniar & Company, a similar vehicle named Dumper Placer was classified under Chapter Heading 87.05 as a special purpose vehicle, not intended for transporting goods. The Tribunal emphasized that the vehicle's purpose, in this case, was collecting garbage, not for transporting goods, leading to its classification under Chapter Heading 87.05.

3. Decision and Rationale:
After careful consideration of submissions, the Tribunal upheld the Commissioner's decision to classify the vehicle under Chapter Heading 87.05. The Tribunal concurred with the Commissioner's detailed analysis, highlighting that the Skip Loader did not result in independently marketable goods and aligned with the principles established in the Maniar & Company case. Consequently, the respondents were deemed eligible for exemption under Notification No. 162/86, leading to the rejection of the Revenue's appeal. The Tribunal found no infirmity in the Commissioner's order and upheld the decision, affirming the respondents' exemption eligibility under Chapter Heading 87.05.

4. Conclusion:
The judgment clarified the classification of the vehicle under Chapter Heading 87.05, emphasizing its status as a special purpose vehicle designed for specific functions like garbage collection. By referencing legal precedents and tribunal decisions, the Tribunal supported the Commissioner's classification and exemption grant, ultimately dismissing the Revenue's appeal. The detailed analysis provided a comprehensive understanding of the case's intricacies and legal interpretations, ensuring a thorough examination of the issues at hand.