2012 (5) TMI 381 - AT - Central Excise

Exemption Notification No. 4/97-C.E. - condition for availment of availability of this exemption is that no credit of duty paid on the chassis had been taken - appellant had received chassis on which LPG tank fabricated had been mounted and there is no dispute that no MODVAT credit of duty paid on chassis had been taken - objection of the department is that the explanation to this entry does not cover the running gear and hence the value of running gear would be includable in the assessable value of the goods - Held that - for the purposes of exemption under this Notification, it is not correct to make distinction between chassis and running gear, when what was supplied by the assessee to the customers was chassis and the assessee had only done the body building on the chassis, therefore, the benefit of exemption under Notification No. 4/97-C.E., cannot be denied Mukul Engineering Works (2010 (3) TMI 605 - CESTAT, MUMBAI) appeal is allowed

Summary

Issues:
1. Classification and duty payment on LPG tanks fitted on semi-trailers.
2. Applicability of Notification No. 4/97 for concessional rate of duty.
3. Inclusion of running gear in assessable value.
4. Time-barred duty demand and imposition of penalties.

Analysis:
1. The appellant company manufactured LPG tanks fitted on semi-trailers, paying duty under Heading 87.04. The dispute arose regarding duty payment on the chassis value. The department issued a show-cause notice for demand of differential duty, interest, and penalties.
2. The appellant argued for exemption under Notification No. 4/97 for vehicles not manufactured by chassis makers. They contended that duty should be on the tank value only, citing conditions of the notification and case precedents supporting their position.
3. The department argued that the running gear is different from the chassis and should be included in the assessable value. They referenced a previous judgment where the value of running gear was not exempted, supporting their stance on the issue.
4. The appellant claimed the duty demand was time-barred, as there was no suppression of facts. They provided evidence of disclosure to support their argument. The department defended the imposition of penalties based on alleged suppression and non-disclosure of relevant facts.

The Tribunal analyzed technical definitions of chassis and running gear, concluding that making a distinction between them for exemption purposes was incorrect. They cited previous judgments supporting their interpretation and held that the impugned order was unsustainable. As a result, the appeal was allowed, setting aside the earlier order.