2012 (11) TMI 824 - AT - Central Excise

Notification No. 162/86-CE - bodies built on the motor vehicle chassis - benefit denied as available on goods classified under Chapter heading 87.02, 87.03 and 87.04 - assessee deemed to be covered under the heading 87.07 - Held that - As decided in AMBALA COACH BUILDERS Versus COMMISSIONER OF C. EX., NEW DELHI 2000 (5) TMI 70 - CEGAT, COURT NO. II, NEW DELHI a practice prevalent regarding levy of duty of excise on the bodies built by independent body builders on the motor vehicle chassis under Headings 87.02 to 87.04 instead of Heading 87.07 and that such bodies were liable to a higher amount of duty of excise than what was levied according to the said practice during the period from 1-5-1991 to 28-2-2001. The Central Government by the said Notification has directed that the duty payable in excess shall not be required to be paid in respect of bodies built by independent body builders on the motor vehicle chassis on which the duty of excise was short-levied during the aforesaid period in accordance with the said practice. As the demand in the present matter relates to the period specified in Section 11C. Notification and the appellants have paid duty under Headings 87.02/87.04 they are eligible to the benefit of the Notification. Accordingly, they are not liable to pay any duty - in favour of assessee.

Summary

Issues:
1. Applicability of notification No. 162/86-CE to bodies built on chassis under heading 87.07 of the Central Excise Tariff.

Analysis:
The appellant filed an appeal against an order confirming a demand and penalty imposed under Section 11AC of the Central Excise Act. The issue revolved around the denial of benefit under notification No. 162/86-CE to bodies built on chassis classified under heading 87.07 of the Central Excise Tariff. The appellant argued that a similar case had been decided in favor of the body builders in a previous tribunal case. The Revenue contended that the bodies built by the appellant fell under heading 87.07 and thus were not eligible for the notification's benefit.

The Tribunal considered the submissions and noted that the appellant, as an independent body builder, received duty-paid chassis to build bodies on motor vehicles. It was highlighted that building a body on a chassis amounts to the manufacture of a motor vehicle. The Tribunal referenced previous decisions affirming that bodies built on chassis remain classifiable under heading 87.07. The Central Government had issued a notification exempting duty on bodies built by independent body builders on chassis where duty had been short-levied during a specified period. As the appellants had paid duty under relevant headings, they were deemed eligible for the notification's benefit, absolving them from any further duty payment.

In conclusion, the Tribunal allowed the appeals, setting aside the impugned order and ruling in favor of the appellant. The decision was based on the applicability of the notification and the classification of bodies built on chassis under heading 87.07 of the Central Excise Tariff. The appellants were granted consequential relief as per the law.