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2023 (10) TMI 733 - AT - Central ExciseValuation of motor vehicles manufactured by the job worker on the duty paid chassis supplied by the Appellant. Whether in relation to the body-built vehicles manufactured and cleared on payment of duty, on landed cost of chassis plus job-work charges, by the body-builder on the chassis supplied by the Appellant, differential excise duty can be demanded from the Appellant by adopting the final price at which the body-built vehicle is sold by the Appellant from RSOs as assessable value for the period prior to 01.04.2007? HELD THAT - The issue is no more res integra as in the Appellant own case, viz. TATA ENGINEERING AND LOCOMOTIVE COMPANY LTD. AND ANOTHER VERSUS UNION OF INDIA AND OTHERS 1988 (2) TMI 72 - PATNA HIGH COURT (RANCHI BENCH), RANCHI , the Hon ble Patna High Court has held that the Appellant who merely supplies the chassis to body-builder and receives the body-built vehicle from the body-builder, is not the manufacturer of the body-built vehicle, even though the Appellant supervises the quality of such body-built vehicles before clearance by body-builder. The Hon ble High Court held the body builders only to be the actual manufacturers. This judgment has been affirmed by the Hon ble Apex Court in U.O.I. VERSUS TATA ENGG. LOCOMOTIVE CO. LTD. 1996 (1) TMI 435 - SC ORDER . Thus, the job-worker is the actual manufacturer and not the raw-material supplier. In the present case, the activity of building body on the chassis amounts to the manufacture of motor vehicles, in terms of the Chapter Note 5 of Chapter 87 of the Central Excise Tariff Act. Accordingly, the body builder has rightly paid excise duty at the time of clearance of bodybuilt vehicle to the RSO. Thus, the demand of duty from the Appellant is not sustainable and therefore, the duty confirmed in the impugned order is set aside. Appeal allowed.
Issues:
Valuation of motor vehicles manufactured by job worker on duty paid chassis supplied by Appellant. Summary: The appeal was filed against the Order-in-Original confirming Central Excise duty on chassis supplied to body builders for building body-built vehicles. The Appellant's submission was that they paid duty on chassis cleared to body builders and body builders paid duty on composite value. The impugned order demanded excise duty based on final price of body-built vehicles sold by Appellant, alleging incorrect discharge of duty. The Commissioner confirmed the demand citing RSOs as place of removal for vehicles. The Appellant argued that they are not manufacturers as per previous judgments and ownership transfer is not relevant for excise duty liability. They also claimed that the demand is barred by limitation. The Tribunal held that the body builder is the actual manufacturer, not the Appellant, and set aside the duty confirmed in the impugned order. Key Points: - Appellant supplied duty paid chassis to body builders for building body-built vehicles. - Appellant paid duty on chassis, body builders paid duty on composite value. - Impugned order demanded duty based on final price of vehicles sold by Appellant. - Commissioner confirmed demand citing RSOs as place of removal. - Appellant argued not being manufacturer as per previous judgments. - Ownership transfer not relevant for excise duty liability. - Demand barred by limitation. - Tribunal held body builder as actual manufacturer, set aside duty confirmed in impugned order.
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