2010 (12) TMI 132 - AT - Central Excise

Classification - The appellants claim classification under Heading 87.04 as motor vehicle for the transport of goods whereas the Department claims classification under Heading 87.06 holding the impugned goods to be chassis only - there are two Chapter Notes, one Chapter Note states that a chassis fitted with a cab is also required to be classified as a chassis, the other Chapter Note enlarges the scope of manufacture of a motor vehicle to include in its ambit building of a body, fabrication, mounting and fitting of structures or equipments on the chassis - It is settled law that two provisions of a statute must be read harmoniously and not in a manner to render one of the provisions redundant - As such, we are of the view that the interpretation placed by the adjudicating Commissioner is valid and the impugned goods namely chassis fitted with cab manufactured by the appellants are classifiable under Heading 87.06 only Penalty - considering the nature of the dispute in this case which relates to classification only, imposition of penalty is not merited in this case - Penalty imposed are set aside Valuation - Assessee have paid duty on a higher value as contended by the learned counsel, the proper course by the appellants would be to apply for refund of excess duty subject to the legal provisions in force -Appeal dismissed

Summary

Issues: Classification of chassis fitted with cab under Heading 87.04 or 87.06, Imposition of penalty, Valuation

Classification Issue Analysis:
The case involves a dispute over the classification of chassis fitted with a cab manufactured by the appellants. The appellants claim classification under Heading 87.04 as a motor vehicle for the transport of goods, while the Department argues for classification under Heading 87.06 as chassis only. The interpretation of Chapter Notes is crucial in determining the correct classification. Chapter Note 4 (or 3 thereafter) states that Heading 87.06 includes chassis whether or not fitted with a cab, while Chapter Note 3 (or 5 thereafter) suggests that fitting a cab on the chassis amounts to the manufacture of a motor vehicle. The Tribunal notes that both Chapter Notes must be read harmoniously to avoid rendering one redundant. Thus, the Tribunal concludes that the classification under Heading 87.06 is appropriate for chassis fitted with a cab, rejecting the appellants' argument for classification under Heading 87.04.

Imposition of Penalty Issue Analysis:
The Tribunal agrees with the appellants' counsel that since the dispute revolves around classification only, the imposition of a penalty is not justified. Therefore, the penalty imposed by the adjudicating Commissioner is set aside, considering the nature of the dispute.

Valuation Issue Analysis:
Regarding valuation, the Tribunal finds that it is beyond the scope of the dispute raised in the show-cause notice. The Department accepted the value declared by the appellants, and if there are concerns about overpayment, the appellants can seek a refund of the excess duty paid, subject to applicable legal provisions. The Tribunal dismisses the appeals except for overturning the penalty imposed under the impugned order.

In conclusion, the judgment primarily addresses the classification issue of chassis fitted with a cab, the penalty imposition, and the scope of valuation, providing detailed analysis and reasoning for each aspect while maintaining consistency with relevant legal provisions and interpretations of Chapter Notes.