2011 (3) TMI 1217 - AT - Central Excise

Classification - whether non-inclusion of valuation of components / parts like landing gears, running gears, pressure plates, etc. while arriving at their assessable value of the LPG tankers manufactured by the appellant was justified? - Held that - Tribunal therein had clearly ruled that the LPG tankers manufactured by the assessees by mounting on trailers were classifiable under Heading 87.07 of the Central Excise Tariff Act and on conversion of such tanks and duty-paid running gear, landing gear and mounting plate into tanker trailer / semi-trailer, the product would be assessable to duty under Heading 8716.00 of the Central Excise Tariff Act read with relevant notification permitting adjustment of duty already paid on the inputs against the duty that would be payable on the final products. In the absence of specific challenge to these findings, the contention that landing gear, running gear, etc. did not form components of LPG tankers cannot be accepted. Regarding stay application - while disposing of the stay application, the Commissioner (Appeals) had duly considered the point relating to prima facie case and had accordingly directed the appellants to deposit an amount of Rs. 9,00,000 - Appeal is dismissed

Summary

Issues:
1. Whether non-inclusion of valuation of components / parts like landing gears, running gears, pressure plates, etc. while arriving at their assessable value of the LPG tankers manufactured by the appellant was justified?
2. Whether in the facts and circumstances of the case, the Commissioner (Appeals) would have dismissed the appeal for non-compliance of the stay order?

Analysis:

Issue 1:
The appellant, a manufacturer of LPG tankers, did not include the cost of certain components like running gears, landing gears, and mounting plates while determining the assessable value of the tankers. The adjudicating authority confirmed the demand of duty based on this omission. The appellant argued that these components were not part of the LPG tankers but were part of trailers, which they did not manufacture. However, it was found that the appellant had disclosed receiving these components from customers and had admitted to mounting them on the tankers. The authorities also noted that the appellant performed additional work on the tankers. Citing a previous Tribunal decision, it was established that the tankers, along with the attached components, were classifiable under a specific tariff heading, justifying the duty liability. The appellant's challenge was dismissed due to lack of specific evidence against these findings.

Issue 2:
Regarding the second issue, the Commissioner (Appeals) had directed the appellant to deposit a specific amount within a set timeframe as a condition for stay of the duty demand. The appellant failed to comply with this order, leading to the dismissal of the appeal for non-compliance. The appellant contended that the dismissal was unjust as the facts were not properly considered. However, the records showed that the Commissioner had indeed evaluated the prima facie case and set the deposit requirement accordingly. Even during the review of the modification application, the same considerations were taken into account. Ultimately, the dismissal for non-compliance with the pre-deposit requirement was deemed appropriate given the circumstances. The appeals were dismissed based on these findings.