1986 (3) TMI 186 - AT - Central Excise

Summary

Issues:
Interpretation of exemption notifications for parts and accessories of motor vehicles during specific periods.

Analysis:
During the period from 1-3-1979 to 1-6-1979, the issue revolved around whether the appellants were entitled to supply wheels manufactured by them to motor vehicle manufacturers free of duty for fitment as original equipment. The dispute stemmed from changes in the Central Excise Tariff and exemption notifications during this time frame. Pre-1-3-1979, wheels were fully exempt under notification No. 99/71-CE and No. 101/71-CE. However, post-Budget proposals in 1979, changes were made to the tariff structure, including rescinding old notifications and issuing new ones. Notification No. 75/79-CE, dated 1-3-1979, provided full exemption for parts falling under item No. 34A if supplied as original equipment. Subsequent notifications further amended the exemption criteria.

The appellants claimed full exemption under notification No. 75/79-CE, filing classification lists accordingly. The lower authorities denied the exemption, citing that wheels were not among the 15 specified parts under the revised item 34A. They contended that wheels were subject to the 8% ad valorem rate under a different notification. The lower authorities did not consider the applicability of notification No. 167/79-CE, dated 19-4-1979, which exempted parts for further manufacture.

The Tribunal analyzed the tariff changes and the effective dates of the amendments. They clarified that the changes in item 34A were not immediately effective and that the old item 34A remained in force until 9-5-1979. Therefore, the exemption under notification No. 75/79-CE applied to wheels during this period. The Tribunal dismissed the department's argument regarding the supersession of old notifications, emphasizing that the successor notification applied to all parts falling under item 34A.

Regarding notification No. 167/79-CE, the Tribunal acknowledged the need for verification of conditions for exemption. They agreed with the department's request for remand to the Assistant Collector to ensure compliance with the prescribed procedures. Ultimately, the Tribunal concluded that both notifications provided exemption for wheels during specific periods, directing the Assistant Collector to verify compliance with the conditions for granting relief.

In conclusion, the Tribunal allowed the appeals, confirming the entitlement of the appellants to the exemptions under the relevant notifications for supplying wheels to motor vehicle manufacturers.