2009 (8) TMI 671 - AT - Central Excise

Motor Vehicle - whether the appellants are entitled to claim exemption under exemption Notification No. 462/86-CE., dated 9th December 1986 as amended from time to time in respect of the vehicle chassis manufactured by them? Held that fuel efficiency test under Notification No 462/86-C.E. can be carried out with or without standard production cab/body. Also, notification only specified that vehicle should fall under Chapter 87, which includes chassis with engine, and in absence of specific provision therein, chassis without vehicle body could not be excluded from benefit of notification.

Issues Involved:
1. Entitlement to exemption under Notification No. 462/86-CE for vehicle chassis.
2. Interpretation of the term "light commercial motor vehicles" in the context of the said notification.
3. Consistency in the Department's stance on the exemption.
4. Alleged discriminatory treatment by the Department.

Issue-Wise Detailed Analysis:

1. Entitlement to Exemption under Notification No. 462/86-CE for Vehicle Chassis:
The primary issue was whether the appellants were entitled to claim exemption under Notification No. 462/86-CE for the chassis they manufactured. The appellants argued that the notification did not specify any sub-heading under Chapter 87, thereby including chassis as well. The Tribunal noted that the notification aimed to promote fuel-efficient light commercial motor vehicles and did not restrict the exemption to any specific sub-heading within Chapter 87. It was concluded that the appellants were entitled to the exemption as the chassis fitted with engines fell under Chapter 87.

2. Interpretation of the Term "Light Commercial Motor Vehicles":
The notification described "fuel-efficient light commercial motor vehicles" as those satisfying specific fuel consumption criteria and falling within Chapter 87. The Tribunal observed that the notification did not limit the exemption to vehicles with bodies and cabins. The methodology for fuel efficiency tests allowed for vehicles without standard production cabs or bodies, indicating that chassis could be included. The Tribunal found that the term should be understood in a generic sense, encompassing chassis both with and without bodies.

3. Consistency in the Department's Stance on the Exemption:
The appellants argued that the Department had previously granted exemptions for chassis under the same notification, and there were no new facts justifying a different stance. The Tribunal noted that the Department had indeed allowed such exemptions in the past, and no new facts were presented to justify a change in view. The Tribunal emphasized that without any new facts, the Department could not arbitrarily change its stance.

4. Alleged Discriminatory Treatment by the Department:
The appellants claimed discriminatory treatment, arguing that similar exemptions were granted to other manufacturers like Ashok Leyland. However, the Tribunal found insufficient evidence to support this claim. The letter from the Department of Industrial Development to Ashok Leyland did not conclusively prove that the circumstances were identical. The Tribunal concluded that, based on the available evidence, there was no substantiated claim of discrimination.

Conclusion:
The Tribunal set aside the impugned order, holding that the appellants were entitled to the exemption under Notification No. 462/86-CE. The appeals were allowed, and the penalty imposed was deemed unnecessary. The decision emphasized the generic interpretation of the term "light commercial motor vehicles" and the need for consistency in the Department's stance unless justified by new facts.

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