2024 (5) TMI 1048 - AT - Central Excise

Levy of National Calamity Contingent Duty (NCCD) - chassis emerges at the intermediary stage and is captively consumed in the manufacture of Dumpers - captively consumed chassis or are they exempted vide N/N. 67/95. Whether chassis emerges at the intermediary stage and is captively consumed in the manufacture of Dumpers? - HELD THAT - There is no whisper of Chapter Note 3 in any of these notices and no new facts have been brought out to show that in view of these changes, the chassis comes into existence even though it is not culminated into a drive away chassis - the change in the Chapter Note, whether or not fitted with a cab will not make any change in the decision rendered earlier because the criteria based on HSN was whether it is a drive away chassis. From the Chapter Heading and the HSN Notes reproduced below, it is clear Chassis fitted with engines and with their transmission and steering gear and axles fall under Chapter 8706. The Commissioner at para 88/88.1 states this heading covers the Chassis frames or the combined to Chassis body frame work for the motor vehicles of headings 8701 to 8705 fitted with their engines and with their transmission and steering gear and axis (with or without wheels). That is to say goods of this heading are motor vehicles without bodies. The above explanation to emphasise the necessity of steering mechanism for qualifying to be called Chassis. There is nothing new in the present show-cause notices nor in the impugned order to be decided afresh since all these factors have been already considered and the decision has been rendered in favour of the appellant. As seen from the Chapter Headings and the HSN Notes, nothing has changed and therefore, the orders discussed above in the appellant s own case has attained finality. Accordingly, the Chassis does not come into existence at the intermediary stage and therefore, the question of dutiability does not arise. Whether NCCD is leviable on these captively consumed chassis or are they exempted vide N/N. 67/95? - HELD THAT - Since it is held that the Chassis does not come into existence at the intermediary stage and therefore, the question of captive consumption does not arise, consequently, the question whether exemption is available to NCCD under N/N. 67/95 becomes only academic and not delved into. The impugned order is set aside - Appeal allowed.

Summary

Issues Involved:
1. Whether chassis emerges at the intermediary stage and is captively consumed in the manufacture of dumpers.
2. Whether NCCD is leviable on these captively consumed chassis or are they exempted vide notification 67/95.

Summary:

Issue 1: Emergence of Chassis at Intermediary Stage
The appellants, M/s. BEML Ltd., challenged the levy of National Calamity Contingent Duty (NCCD) on dumper chassis allegedly manufactured and captively consumed during the manufacture of dumpers. The Commissioner had previously held that the chassis fitted with engines are classifiable under Chapter Heading 8706 0043 of the CETA and emerge during the course of manufacture of dumpers. However, the Tribunal in the appellant's own case (CCE, Mysore vs. BEML: 2010 (261) ELT 596 (Tri-BANG)) had upheld that the chassis did not come into existence as a separate identifiable commodity and that the entire process is an integrated one, resulting in a fully finished dumper. The Tribunal observed that the investigation failed to establish that a drive-away chassis, capable of movement, emerged at an intermediate stage. The findings were based on detailed process descriptions, technical opinions, and affidavits, which were not refuted by the Revenue. The Tribunal concluded that the chassis does not emerge as a separate excisable product during the manufacturing process.

Issue 2: Levy of NCCD and Exemption under Notification No.67/1995
The Revenue argued that the amendment to Chapter Note 3 of Chapter 87 w.e.f. 07.03.2005, which states "Heading 8706 shall include chassis whether or not fitted with a cab," changed the legal position. However, the Tribunal found that this amendment did not alter the earlier findings that a drive-away chassis did not emerge during the manufacturing process. The Tribunal noted that the present show-cause notices relied on the same documents and facts as the earlier ones, which had already been addressed and set aside. The Tribunal held that the chassis did not come into existence at the intermediary stage and thus, the question of dutiability and NCCD levy did not arise.

Conclusion:
The Tribunal set aside the impugned order, holding that the chassis does not emerge as an intermediate product during the manufacturing process of dumpers, and thus, NCCD is not leviable. The appeal was allowed, and the question of exemption under Notification No.67/1995 became academic and was not delved into.