2015 (1) TMI 1137 - AT - Central Excise

Benefit of Notification 162/86-CE dated 01.03.1986 which granted concessional rate of duty - whether the appellant is to be fastened with the duty liability on the vehicles which was deregistered as from taxis and registered as private vehicle; which was initially cleared by the appellant by availing the benefit of Notification 162/86-CE - Held that - while clearing the vehicles from the factory premises, the appellant had adhered to the condition laid down in such Notification - Following decision of Maruti Udyog Ltd. 1998 (8) TMI 399 - CEGAT, NEW DELHI - impugned order is liable to be set aside - Decided in favour of assessee.

Summary

Issues:
1. Interpretation of Notification 162/86-CE regarding duty liability on vehicles converted from taxis to private vehicles.
2. Whether the appellant can be held responsible for the misuse of benefits by dealers.

Issue 1: Interpretation of Notification 162/86-CE

The appeal revolved around the duty liability on vehicles cleared as taxis under Notification 162/86-CE but later deregistered and converted into private vehicles. The appellant followed the conditions of the notification while clearing the vehicles. The Revenue authorities contended that the appellant should not have availed the benefits of the notification due to the subsequent conversion of some taxis into private vehicles. The Adjudicating Authority upheld the demands, leading to the appeal.

The appellant argued that they should not be held accountable for the dealers' misuse of benefits. They cited a previous Tribunal decision in the case of Maruti Udyog Ltd. where it was held that the assessee cannot be blamed for actions taken by dealers. The appellant also highlighted that the Supreme Court had dismissed the Revenue's appeal on a similar issue related to the same notification.

The Tribunal analyzed the situation and referred to the decision in Maruti Udyog Ltd., emphasizing that once the appellant submitted genuine certificates as required by the notification, they should not be held liable for duty if the vehicles were later found not to be in use as taxis. The Tribunal clarified that the responsibility lies with the Revenue to verify the documents provided by the appellant and not to impose continuing duty liability after compliance with the notification's conditions. The Tribunal's decision was upheld by the Apex Court, leading to the setting aside of the impugned order and allowing the appeal.

Issue 2: Accountability of Appellant for Dealer Misuse

The core argument was whether the appellant could be held responsible for the misuse of benefits by dealers who converted some taxis into private vehicles after availing the duty concession under Notification 162/86-CE. The appellant contended that they adhered to the conditions of the notification while clearing the vehicles and should not be penalized for the subsequent actions of the dealers. The Tribunal, relying on the precedent set in Maruti Udyog Ltd., reiterated that the appellant should not bear duty liability once they had submitted genuine certificates as required by the notification.

The Tribunal's decision emphasized that the responsibility to verify the authenticity of documents and compliance with notification conditions rested with the Revenue authorities. The Tribunal's interpretation of the notification and the decision in Maruti Udyog Ltd. were upheld by the Apex Court, leading to the setting aside of the Adjudicating Authority's decision and allowing the appellant's appeal.

This detailed analysis highlights the key legal issues, arguments presented, and the Tribunal's decision, providing a comprehensive understanding of the judgment's implications and outcomes.