2013 (7) TMI 433 - AT - Central Excise

Manufacturing of special purpose vehicle - Benefit of Notification NO. 6/2002-CE dated 1.3.2002 and subsequent Notification No.06/2006-CE dated 1.3.2006 Condition for benefit of the Notifications - Duty is payable on the equipments used in the manufacture of Special Purpose Vehicle - Benefit of the Notifications denied on the ground that the appellants have not fulfilled the conditions of the Notifications Held that - The exemption (from payment of duty) is available provided excise duty has been paid on the chassis and the equipment used in its manufacture - Excise duty has been paid on the chassis. Excise duty has also been paid on all the inputs used in the manufacture of this vehicle Incorrect reasoning given by Revenue that equipment used in the notification refers to the final body manufactured by the appellants - The term equipment used in the notification necessarily refers to the material and the inputs which have gone into manufacturing the special purpose motor vehicle - Appellants are covered by the exemption notification - Appellants are entitled to the benefit of the exemption notification following the judgment in the case of Hydraulic Industries 2002 (10) TMI 105 - SUPREME COURT OF INDIA Matter is remanded for de novo adjudication keeping all issues open.

Summary

Issues:
- Denial of benefit of Notifications No. 6/2002-CE and No. 06/2006-CE
- Interpretation of conditions of the Notifications
- Allegation of suppression with intent to evade payment of duty
- Time-barred demand
- Separate invoices for equipment

Analysis:
The appellant appealed against an adjudication order denying them the benefit of Notifications No. 6/2002-CE and No. 06/2006-CE, claiming they met the conditions. The dispute arose as the adjudicating authority contended that duty was not payable on certain equipment. The appellant argued that chassis and some equipment were duty paid, essential for manufacturing Special Purpose Vehicles. They cited a Supreme Court case emphasizing duty payment on inputs for entitlement to nil rate of duty. The Revenue claimed separate invoices indicated ineligibility for the benefit. The Tribunal found most items were duty paid, crucial for the Fire Fighting Vehicle, and referenced the Supreme Court's decision in a similar case. The Tribunal remanded the matter for fresh adjudication, considering the law laid down by the Supreme Court.

The appellant contended that the demand was time-barred due to regular monthly returns filed. The Revenue argued that separate invoices proved ineligibility. The Tribunal noted that most items were purchased with duty paid and some fabricated on duty paid chassis, essential for the Special Purpose Vehicle. Referring to the Supreme Court's interpretation, the Tribunal set aside the order for reconsideration by the adjudicating authority. The Tribunal allowed the appeal by remanding the case for a fresh decision, emphasizing the need to consider all issues and provide a personal hearing to the appellants.