2017 (11) TMI 1178 - AT - Central Excise

Valuation - includibility - value of chassis supplied free of cost by the telecom company - classification of goods - Held that - the Adjudicating Authority fell into serious error in ordering classification under 7308. It is obvious that the goods which are being cleared are motor vehicles on which Telescopic Towers have been mounted. These goods are appropriately classified under heading 8705 as special purpose motor vehicles. The appellant has also claimed that they will be entitled to nil rate of duty in terms of serial no 50 of the N/N. 6/2006-CE dated 01/03/2006 - Held that - In the absence of any clear finding by the authority below whether the above condition is satisfied by the appellant, we remand the matter to the Original Authority for the limited purpose of verification of the conditions attached to notification - matter on remand. Appeal allowed by way of remand.

Summary

Issues:
Classification of goods under CETH 7308 or 8705; Correct valuation for excise duty purposes; Eligibility for exemption under Notification No. 6/2006-CE.

Classification of Goods:
The case involved the classification of goods manufactured by the appellant as Mobile Telescopic Towers (MTT) mounted on chassis/trailers. The original authority classified the goods under CETH 7308, considering them as fabricated steel structures. However, the Tribunal disagreed, stating that the goods were motor vehicles with Telescopic Towers mounted on them, falling under Heading 8705 as special purpose motor vehicles. The appellant claimed entitlement to nil rate of duty under Notification No. 6/2006-CE, subject to specific conditions being met. The Tribunal remanded the matter to verify if the conditions for exemption were satisfied.

Valuation for Excise Duty:
Regarding valuation for excise duty purposes, the Tribunal noted that in cases where the chassis were purchased by the appellant, the duty was paid on the gross assessable value including the chassis. However, when chassis were supplied free of cost, the duty was not paid on the value of the chassis. The Tribunal directed the adjudicating authority to include the value of such free-supplied chassis and re-determine the duty liability accordingly.

Exemption under Notification No. 6/2006-CE:
The appellant claimed entitlement to full exemption under Notification No. 6/2006-CE, which required the goods to be manufactured out of chassis and equipment on which excise duty had already been paid. The Tribunal remanded the matter to verify if the conditions of the notification were met, and if so, the appellant would be extended the benefit of clearance at a nil rate. If the conditions were not satisfied, the question of valuation for excise duty purposes would need to be addressed.

In conclusion, the Tribunal set aside the impugned order, classified the goods under CETH 8705, and remanded the matter solely for the limited purpose of verifying the conditions of Notification No. 6/2006-CE. The appeal was allowed by way of remand, emphasizing the importance of correct classification and valuation for excise duty determination.