1995 (4) TMI 147 - AT - Central Excise

Issues Involved:
1. Classification of the manufactured item.
2. Whether the activity conducted by the appellant amounts to manufacturing.
3. Appropriateness of the demand and penalty imposed.
4. Time-barred nature of the demand.

Issue-wise Detailed Analysis:

1. Classification of the Manufactured Item:
The central issue in this case is the classification of the item manufactured by the appellant, whether it should be classified under Heading 87.04 (Motor vehicles for the transport of goods), Heading 87.09 (Works trucks, self-propelled, not fitted with lifting or handling equipment), or Heading 84.27 (Fork-lift trucks; other works trucks fitted with lifting or handling equipment). The appellants argued that the item, although named and invoiced as a "Dumper," is actually a works truck used for short-distance transport within limited areas and should be classified under Heading 87.09 or alternatively under Heading 84.27. They contended that the item is not fit for use on public roads and is used for handling materials within factories or warehouses. The Department, however, maintained that the item is a dumper based on its construction and the description in the catalogue, which indicated that it is used for transporting goods on rough roads and construction sites.

2. Whether the Activity Conducted by the Appellant Amounts to Manufacturing:
The appellants argued that their activity of assembling work trucks from bought-out items does not constitute manufacturing. They cited the case of Darshan Singh Pavitar Singh & Others v. Union of India & Others, which dealt with whether building bodies for buses and trucks amounted to manufacturing motor vehicles. However, the Tribunal found this argument unconvincing, noting that the assembly of various parts and components in the appellant's garage/factory cum-residence does amount to manufacturing. The Tribunal emphasized that the nature, construction, and end-use of the product are relevant factors in determining its classification.

3. Appropriateness of the Demand and Penalty Imposed:
The Department issued a show cause notice demanding duty on three dumpers and proposed a penalty for contravening Central Excise Rules. The appellants denied liability, arguing that the item manufactured was a forklift, not a dumper, and that they had followed the Central Excise Procedure by delivering items through Delivery Challans and filing declarations. The Collector, however, concluded that the product was correctly classifiable under sub-heading 8704.00 and imposed the demand and penalty.

4. Time-barred Nature of the Demand:
The appellants contended that the demand was barred by time, as they had filed a declaration on 5-2-1992, while the show cause notice was issued on 21-2-1992 for the period March 1991 to August 1991. The Department countered that no classification list was filed, nor was a license taken, and there was no evidence of the declaration being filed, as observed by the Collector.

Conclusion:
The Tribunal, after considering the submissions and perusing the records, found that the issue of classification requires further examination with reference to the construction, characteristics, and actual use of the vehicle. The matter was remanded to the concerned Collector for re-adjudication, allowing the appellants to adduce additional evidence and raise issues such as time barring and other relevant matters during the course of re-adjudication.

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