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2016 (10) TMI 473 - AT - Central ExciseDemand of duty with interest and penalties - construction equipments - Whether the parts of WTLB and Hydra Cranes are liable for duty prior to 29.04.2010 being covered under automobiles or not? - Held that - the expression automobiles has not been defined in the Central Excise Act. Therefore, it is not permissible to adopt the definition of very same expression appearing in another different enactment. The case referred CCE, Pune-I vs JCB India Ltd. 2014 (2) TMI 632 - CESTAT MUMBAI not applicable in the present case as there is a disagreement with the view taken in the case. The matter remanded to the Tribunal for consideration on the issue that How to define expression automobiles when it is not defined in Central Excise Act/Rules or any Notification issued thereunder. Can the expression given in the Acts, namely, Air (Prevention and Control of Pollution) Act, 1981 or Motor Vehicles Act, 1988 be adopted or that meaning of the expression automobiles can be assigned from the uniformally defined in the various dictionaries and known in common parlance? Another matter which needs consideration is the Notification No.11/2011 dated 24.03.2011 giving the effect of demand of duty w.e.f. 29.04.2010 on the parts, components and assemblies of goods falling under Tariff Item No.8426 41 00, headings 8417, 8429 and sub heading 8430.10 is clarificatory and applicable prior to 29.04.2010 or mandatory and applicable from 29.04.2010 onward.
Issues Involved:
1. Excisability of spare parts of Wheeled Tractor Loader Backhoe (WTLB) and Hydra Cranes repacked for retail sales. 2. Definition and applicability of the term "automobiles" for the purpose of Central Excise Duty. 3. Interpretation of amendments and notifications regarding the duty on parts, components, and assemblies of construction machinery. Detailed Analysis: 1. Excisability of Spare Parts: The appellants, manufacturers of construction equipment like WTLB and Hydra Cranes, also trade in spare parts from separate warehouses. The dispute centers on whether repacking these spare parts for retail sales constitutes "manufacture" under Section 2(f)(iii) of the Central Excise Act, 1944. The department argued that the repacking of parts of WTLB and Hydra Cranes amounts to manufacture, thus attracting excise duty. A show cause notice was issued demanding unpaid duty of ?6,07,44,253 along with interest and penalties. 2. Definition of "Automobiles": The core issue is whether WTLB and Hydra Cranes fall under the term "automobiles" as used in the Central Excise Act. The appellants contended that these items are construction machinery and should not be classified as automobile parts. They cited Board’s circulars and argued that the term "automobile" should be interpreted in the context of the Central Excise Tariff and not based on definitions from the Motor Vehicle Act, 1988, or the Air (Prevention & Control of Pollution) Act, 1981. The Tribunal in the JCB India Ltd. case had previously held that such machinery could be considered automobiles, but this judgment was challenged by the appellants. 3. Interpretation of Amendments and Notifications: The appellants argued that the amendment to the third schedule of the Central Excise Act, 1944, by Finance Act, 2011, which included parts of construction machinery under excisable goods, should only apply from 29.04.2010 onwards and not retrospectively. The Tribunal in JCB India Ltd. had taken a different view, which the appellants disputed, arguing that the amendment was not meant to apply retrospectively. Tribunal's Findings: Excisability of Spare Parts: The Tribunal noted that the activity of repacking parts of WTLB and Hydra Cranes for retail sales could be deemed "manufacture" as per the third schedule of the Central Excise Act, 1944. However, the critical question was whether these parts qualify as "automobile" parts. Definition of "Automobiles": The Tribunal disagreed with the previous judgment in JCB India Ltd., which had adopted definitions from other acts. Instead, it emphasized that the term "automobile" should be understood in its ordinary sense and as defined in various dictionaries, which uniformly describe it as a passenger car or goods carrier. The Tribunal referred to the Supreme Court's ruling in MSCO Pvt. Ltd. vs Union of India, which cautioned against using definitions from unrelated statutes. Interpretation of Amendments: The Tribunal found that the amendment made by Notification No.11/2011 dated 24.03.2011, which included parts of construction machinery under excisable goods, was intended to apply from 29.04.2010 onwards. It criticized the JCB India Ltd. decision for misinterpreting the retrospective applicability of the amendment. Referral to Larger Bench: Given the conflicting interpretations, the Tribunal decided to refer the following issues to a Larger Bench: 1. How to define the term "automobiles" when it is not defined in the Central Excise Act/Rules or any Notification issued thereunder. Should definitions from other acts like the Air (Prevention and Control of Pollution) Act, 1981, or Motor Vehicles Act, 1988, be adopted, or should the term be understood as defined in various dictionaries and common parlance? 2. Whether the Notification No.11/2011 dated 24.03.2011, which gave effect to the demand of duty from 29.04.2010, is clarificatory and applicable prior to 29.04.2010 or mandatory and applicable only from 29.04.2010 onwards. Conclusion: The Tribunal's decision to refer the matter to a Larger Bench underscores the complexity and significance of defining "automobiles" within the context of the Central Excise Act and the retrospective applicability of amendments. This referral aims to resolve these critical issues comprehensively.
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