2011 (2) TMI 727 - AT - Central Excise

Manufacturing / fabrication of body building on chassis - classification under heading 87.7 or under heading 87.02 - Assessee submitted that after the introduction of Note 4 to Chapter 87, the activity of body building or fabrication or mounting or structures or equipment on the chassis shall amount to manufacture of motor vehicles i.e. under Tariff Heading 87.02 as held by the apex court in CCE Mumbai Vs Satguru Auto Builders 2005 -TMI - 486 - SUPREME COURT OF INDIA - The assessees are, therefore, not required to pay any differential duty under Chapter Heading 87.07 as held by the Revenue - Decided in favour of assessee.

Summary

Issues: Classification of driver cabins and rear body under CET sub-heading 8707.00 vs. Chapter Heading 87.08; Duty demands and differential duty under Chapter Heading 87.07.

In this judgment by the Appellate Tribunal CESTAT, Chennai, the issue revolved around the classification of driver cabins and rear body manufactured by the assessees. The Revenue had classified these items under CET sub-heading 8707.00 and imposed differential duty demands on the assessees. The assessees contended that their products should be classified under Chapter Heading 87.08, which attracted a lower duty rate compared to goods falling under Chapter Heading 87.07. The Tribunal examined the matter and referred to Note 4 to Chapter 87, which states that activities like body building or fabrication on the chassis amount to the "manufacture" of motor vehicles under Tariff Heading 87.02. Citing the decision in CCE Mumbai Vs Satguru Auto Builders, the Tribunal held that the assessees were not liable to pay any differential duty under Chapter Heading 87.07 as determined by the Revenue. Consequently, the impugned orders were set aside, and the appeals were allowed. The judgment highlights the significance of proper classification under the Customs Tariff Act and the interpretation of relevant legal provisions to determine the applicable duty rates accurately.