2008 (3) TMI 31 - SC - Central Excise

Classification of motor cabs classification of chassis is not relevant for deciding the classification of motor cabs seating capacity of which the registration certificates had been granted is more appropriate statutory documents to decide the classification of motor cabs

Summary

Issues: Classification of motor cabs for duty payment under Central Excise Act 1944, National Calamity Contingency Duty (NCCD) payment, reliance on manufacturer's invoices and job cards for classification.

Classification of Motor Cabs:
The appeal involved the classification of motor cabs manufactured by the respondent under the Central Excise Act, 1944. The respondent was engaged in body building on duty paid chassis, which constituted manufacturing as per Chapter 87 of the Act. The dispute arose when the appellant classified the motor cabs under a different sub-heading than the one specified for National Calamity Contingency Duty (NCCD) payment, leading to a demand notice for recovery. The respondent contended that the job cards indicated a seating capacity of more than 16 seats, warranting a different classification. The appellate authority rejected this contention, citing precedents that new evidence cannot be entertained at later stages. However, the Tribunal allowed the respondent's appeal, emphasizing that the seating capacity of the vehicles exceeded 12, justifying classification under the specific sub-heading for NCCD payment.

National Calamity Contingency Duty (NCCD) Payment:
The issue of NCCD payment on the motor cabs was central to the dispute. The appellant imposed a demand for NCCD payment based on the classification of the motor cabs under a particular sub-heading. The respondent argued that NCCD was not payable as the seating capacity of the vehicles exceeded 12, aligning with a different sub-heading. The Tribunal agreed with the respondent, setting aside the demand for NCCD payment as the vehicles fell under the sub-heading meant for motor vehicles with a seating capacity exceeding 12, excluding the driver.

Reliance on Manufacturer's Invoices and Job Cards for Classification:
A significant aspect of the case was the reliance on manufacturer's invoices and job cards for the classification of the motor cabs. The appellant argued that relying solely on the manufacturer's invoice for classification was erroneous, while the respondent contended that both the manufacturer's invoices and the job cards supported the non-payment of NCCD. The Tribunal considered the classification based on seating capacity and the alignment of sub-headings in the Central Excise Tariff Act, ultimately ruling in favor of the respondent. The judgment highlighted the importance of registration certificates and customer contracts in determining duty payability, emphasizing factual findings over manufacturer opinions for classification.

In conclusion, the Supreme Court set aside the impugned judgment, allowing the respondent's appeal and rejecting the demand for NCCD payment. The decision underscored the significance of seating capacity, registration certificates, and contractual terms in classifying motor cabs for duty payment under the Central Excise Act, 1944.