1991 (7) TMI 181 - AT - Central Excise

Summary

Issues Involved:
1. Classification of LPG Tankers
2. Assessable Value of Tanker-Trailers
3. Applicability of Extended Time Limit u/s 11A
4. Penalty and Confiscation

Summary:

1. Classification of LPG Tankers:
The appellants, a small-scale unit, manufactured LPG tankers mounted on duty-paid chassis. The Central Excise authorities classified these tankers under Heading 8704.00, attracting duty at Rs. 4,000/- per unit under Notification No. 162/86. However, LPG tanks of capacity over 25,000 liters, mounted on duty-paid prime movers and trailers, were alleged to be misdeclared as motor vehicles instead of being classified under Heading 8716.00. The Additional Collector held that the LPG tanks were separately assessable under Heading 8609.00, and the final product was classifiable under Heading 8716.00.

2. Assessable Value of Tanker-Trailers:
The assessable value of the tanker-trailer was determined by aggregating the value of the landing gear, running gear, and pressure plate with the value of the fabricated tank. The appellants contended that the integrated product, known as "Articulated Vehicles," should be classified under Heading 8704.00, attracting duty at Rs. 4,000/- per vehicle. They argued that the trailers were duty-paid under Heading 8716.00, and no further duty should be levied. However, the Additional Collector's decision to classify the product under Heading 8716.00 was upheld, as it was deemed that the LPG tank mounted on the trailer chassis resulted in a semi-tanker-trailer.

3. Applicability of Extended Time Limit u/s 11A:
The demand for Rs. 3,58,303.20 for the period 1-4-1987 to 23-12-1987 was contested on the grounds of limitation. The appellants argued that there was no suppression of facts, as their manufacturing activities were known to the department, and classification lists were approved. The Tribunal held that the extended period under proviso to Section 11A could not be invoked, as there was no evidence of wilful mis-statement or suppression of facts.

4. Penalty and Confiscation:
The order of confiscation for Semi-Tanker Trailer No. 57 was upheld, but the redemption fine was reduced to Rs. 5,000/-. The penalty was also reduced to Rs. 2,500/-. For Tanker No. 55, it was found that the duty was not debited due to a bona fide clerical error, and no penalty was imposed.

Conclusion:
The appeal was disposed of with the following orders:
1. LPG tanks for mounting on trailers are classifiable under Heading 87.07, and the final product under Heading 8716.00.
2. The demand for Rs. 3,58,303.20 was set aside as barred by limitation.
3. Confiscation of Tanker No. 57 was confirmed, with reduced redemption fine and penalty.