2006 (2) TMI 36 - AT - Central Excise

Central Excise Motor Vehicle Assessable value (1) Running gear, landing gear and pressure-plates are parts of Trailer and not parts of Chassis (2) Classification list claimed exemption (3) Demand (4) Limitation (5) Imposition of penalty

Summary

Issues:
Short levy of duty on LPG Tanker mounted on Trailer due to non-inclusion of essential items in the assessable value; Applicability of exemption under Notification No. 241/86-C.E.; Bar of limitation for demanding duty; Wilful suppression of facts by the assessee; Extending benefit of Modvat credit to the assessee; Imposition of penalty under Section 11AC.

The judgment addresses the issue of short levy of duty on LPG Tanker mounted on Trailer because the value of three essential items, namely Running gear, landing gear, and pressure plates, was not included in the assessable value. The Commissioner confirmed the short levy and imposed a penalty under Section 11AC. The Tribunal found that these items are parts of the Trailer, not the Chassis, for which an exemption under Notification No. 241/86-C.E. was claimed. The exemption applies to motor vehicles manufactured from Chassis on which duty has been paid. Since the items in question are not part of the Chassis but of the finished goods, their value should have been included in the assessable value. The Tribunal rejected the appellants' argument that the items were not required to be included in the value of the finished goods.

Regarding the limitation for demanding duty, the Tribunal noted that the dispute was not about the denial of the Notification's benefit but about the inclusion of the value of the three items in the assessable value. The Commissioner relied on the statement of the working partner, indicating wilful suppression of facts by the assessee. The Tribunal upheld the finding of suppression and rejected the plea of non-applicability of the extended period of limitation. However, the Tribunal accepted the assessee's alternate plea for the extension of Modvat credit, subject to the production of documents evidencing duty payment on the disputed items.

The Tribunal also discussed the imposition of the penalty under Section 11AC, upholding it for the period in dispute. The argument that part of the penalty should be set aside due to the introduction of Section 11AC at a later date was deemed legally unacceptable. The Tribunal referred to a recent judgment of the Apex Court to support this decision. Ultimately, the appeal was disposed of with the decisions outlined in the judgment.