2005 (9) TMI 156 - AT - Central Excise

Summary

Issues: Classification dispute between appellants and Department regarding motor vehicles built on chassis supplied by M/s. Tata Motors Ltd.

Analysis:
The appellants were engaged in body building on chassis supplied by motor vehicle manufacturers, particularly M/s. Tata Motors Ltd. The invoices from the chassis manufacturers indicated a tariff classification as 8706.29, while the appellants classified the goods under sub-heading 8702.90 and paid duty at 16%. The Department objected to this classification, arguing that the motor vehicles should be classified under sub-heading 8702.10, attracting National Calamity Contingent Duty (NCCD). Both lower authorities sided with the Department, leading to a classification dispute.

It was established that the seating capacity of the vehicles manufactured by the appellants exceeded 12, excluding the driver, making them classifiable under sub-heading 8702.90. The chassis supplied by M/s. Tata Motors Ltd. was classified under sub-heading 8706.29 by the manufacturer, as indicated in the invoices. Notably, the tariff entry 8706.29 specified that the chassis fell under this category was meant for motor vehicles of sub-heading 8702.90. Therefore, the appellants' product should not have been classified under sub-heading 8702.10, which attracts NCCD. As sub-heading 8702.90 does not attract NCCD, the impugned order classifying the product under sub-heading 8702.10 and demanding NCCD was set aside, and the appeal was allowed.

This detailed analysis highlights how the correct classification of goods based on the seating capacity and the manufacturer's classification under the relevant tariff entry led to the resolution of the classification dispute in favor of the appellants.