2008 (4) TMI 95 - AT - Central Excise

Assessee is engaged in the manufacture of what they call Dumper SH 8704.30 and the department calls Dumper Chassis SH 8706.49 - non-payment of NCCD by comparing impugned item & fully built dumper it cannot be said that the product in question which does not have the box-like movable body has the essential character of a fully built dumper hence classifiable as Dumper Chassis u/sh 8706.49

Summary

Issues:
1. Classification of product as 'dumper chassis' or 'dumper'.
2. Applicability of National Calamity Contingent Duty (NCCD) and exemption under Notification No. 67/95-C.E.

Issue 1: Classification of product as 'dumper chassis' or 'dumper':

The case involved a dispute regarding the classification of the product manufactured by the assessee as either 'dumper chassis' or 'dumper'. The original authority and the Commissioner (Appeals) considered the product to be 'dumper chassis' based on the absence of certain components essential for a fully built dumper. The appellate authority observed that the product in question lacked the box-like body crucial for dumping materials, which is lifted by the tipping cylinder. As per Rule 2 of the Rules of Interpretation of the First Schedule to the Central Excise Tariff Act, the absence of this essential component led to the classification of the product under SH 8706.49 as 'dumper chassis' rather than SH 8704.30 as 'dumper'. Consequently, the assessee's appeal challenging this classification was dismissed.

Issue 2: Applicability of National Calamity Contingent Duty (NCCD) and exemption under Notification No. 67/95-C.E.:

The controversy also revolved around the imposition of National Calamity Contingent Duty (NCCD) at 1% on the product in question and the applicability of exemption under Notification No. 67/95-C.E. The Revenue issued a show-cause notice for recovery of NCCD and penalty for non-payment. The original authority confirmed the demand and penalty, emphasizing that the product was 'dumper chassis' subject to NCCD. However, the appellate authority considered NCCD as a duty of excise for the purposes of the exemption under Notification No. 67/95-C.E., granting the benefit of exemption to the assessee. The Tribunal referred to a previous decision that upheld the admissibility of the benefit of a similar notification to NCCD leviable under the Finance Act, 2001. The Tribunal rejected the Revenue's contention that NCCD was merely a surcharge, emphasizing that the relevant provisions of the Finance Act and Circular of the CBEC supported NCCD as a duty of excise. Consequently, the Tribunal dismissed the Revenue's appeal challenging the grant of exemption under Notification No. 67/95-C.E. to the assessee.

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