2012 (8) TMI 830 - AT - Central Excise

Waiver of pre deposit - Classification of goods - Classification under Heading 8705 or under Chapter 73 - benefit under exemption Notification No. 6/2006-C.E. (Sl. No. 87) - Held that - chassis on which the telescopic tower is fitted is duty paid and that the appellant have also paid the duty on the value of telescopic tower mounted by them. Prima facie we are of the view that mobile telescopic tower would be correctly classifiable under Heading 8705 as special purpose motor vehicle and not under Chapter 73 and if this is so, the same being manufactured out of duty paid chassis and duty paid telescopic tower would be eligible for exemption under Notification No. 6/2006-C.E., dated 1-3-2006 (Sl. No. 50). The appellant thus have a strong prima facie in their favour and hence the requirement of pre-deposit of duty demand, interest and penalty is waived for hearing the appeal and recovery thereof is stayed till disposal of the appeal - Stay granted.

Summary

Issues:
Classification of mobile telescopic tower under Chapter 73 or Heading 8705 for duty payment and exemption eligibility under Notification No. 6/2006-C.E. (Sl. No. 87).

Analysis:
The appellant manufactured telescopic towers mounted on duty paid chassis and cleared mobile telescopic towers for services. The dispute arose when the department claimed duty on the entire value of the mobile tower, including the chassis, under Chapter 73, not eligible for exemption under Notification No. 6/2006-C.E. (Sl. No. 87). The show cause notice demanded duty, interest, and penalty, confirmed in the order-in-original by the Commissioner, who classified the tower under Chapter 73. The appellant appealed against this decision.

During the hearing, the appellant argued that if the chassis value is included, the goods should be classified under Heading 8705, eligible for the exemption. The department contended that the tower falls under Chapter 73, not a special purpose vehicle under Heading 8705. The Tribunal considered both arguments, noting the duty paid chassis and tower value. It found the tower classifiable under Heading 8705 as a special purpose motor vehicle, eligible for exemption under Notification No. 6/2006-C.E. (Sl. No. 50). The Tribunal acknowledged a strong prima facie case in favor of the appellant, waiving the pre-deposit requirement for duty demand, interest, and penalty during the appeal hearing, with recovery stayed until appeal disposal. The stay application was allowed, and the appeal was scheduled for further proceedings.