2008 (6) TMI 123 - AT - Central Excise

Appellants undertake the body building activity on the chassis received which is duty paid - Eligibility for exemption under Sl. No. 212 of Notification no. 6/2002 appellant satisfied the condition of the notification ibid; that credit of duty paid on chassis not taken further, proviso to Condition No. 52 of Sl. No. 212 also not debar such exemption impugned entry no. 212 is held to be applicable on impugned goods cleared appellant is entitled for exemption under serial no. 212

Summary

Issues:
Interpretation of exemption notification under Notification 6/2002-Central Excise dated 1-3-2002 regarding the classification of chassis manufacturers and body builders under Serial No. 212 and Serial No. 214 respectively.

Analysis:
The case involved a dispute regarding the classification of the appellants under Serial No. 212 or Serial No. 214 of Notification 6/2002-Central Excise. The appellants received duty paid chassis from KSRTC and performed body building activities on them. The Revenue contended that the appellants should be classified under Serial No. 214 as manufacturers of motor vehicles. However, the appellants argued that they should fall under Serial No. 212 as they did not avail credit of duty paid on the chassis and satisfied the conditions specified therein.

The learned Advocates representing the appellants highlighted that the distinction between Serial No. 212 and Serial No. 214 was based on the source of the chassis, not the category of manufacturers. They argued that the lower authority erred in concluding that Serial No. 212 would apply only to motor vehicles manufactured on duty paid chassis 'purchased' by the manufacturer. They also pointed out errors in the adjudicating authority's interpretation of the prohibition in Serial No. 212.

Moreover, the appellants contended that the issue involved the interpretation of the exemption notification and did not warrant allegations of evading duty payment or imposition of penalties under Section 11AC. They cited relevant judgments to support their argument. Additionally, they emphasized that there was no contravention of the provisions of Rule 25 of the Central Excise Rules.

On the other hand, the Departmental Representative argued that the appellants should be classified under Serial No. 214 as manufacturers of motor vehicles, given that they purchased duty paid chassis and undertook body building activities. The Revenue's position was that the appellants became owners of the duty paid chassis and thus fell under the description in Column 3 of Entry 214.

After carefully reviewing the case records, the Tribunal found that the appellants satisfied the conditions specified under Serial No. 212 of the notification. The vehicles in question were covered under Chapter Heading 87 and met the description provided in Serial No. 212. The Tribunal noted that the appellants did not take credit of duty paid on the chassis and fulfilled the conditions outlined under Serial No. 212. Consequently, the Tribunal held that the appellants were entitled to the benefit of the exemption under Serial No. 212 and set aside the impugned order, allowing the appeals with consequential relief.