2006 (6) TMI 44 - AT - Central Excise

Central Excise Manifolds Manifolds (Structures) manufactured from iron and brass items used as stand for gas cylinders which are mounted on chassis of motor vehicle (2) Classification and Valuation (3) Exemption under Notification No. 5/92-CE (4) Demand (5) Natural justice (6) Limitation

Issues Involved:
1. Validity of the protest letter under Rule 233B of Central Excise Rules, 1944.
2. Classification of manifolds under the correct tariff heading.
3. Eligibility for exemption under Notification No. 5/98.
4. Inclusion of the value of gas cylinders and other components in the assessable value of manifolds.

Issue-wise Detailed Analysis:

1. Validity of the Protest Letter under Rule 233B of Central Excise Rules, 1944:
The appellants contested the Commissioner (A)'s finding that they did not follow the procedure under Rule 233B, which rendered their refund claim time-barred. The appellants provided a chronology of events and correspondence to demonstrate compliance with Rule 233B. The Tribunal agreed with the appellants, noting that there was sufficient evidence of duty payment under protest. The Tribunal cited several case laws, including I.C.E.M. Engineering Co. P. Ltd. Vs. CCE and P.V.P. Ltd. Vs. CCE, supporting the appellants' position that the Superintendent of Central Excise was a proper officer to receive the protest letter. Consequently, the Tribunal set aside the Order-in-Appeal and restored the Order-in-Original, allowing the refund claim.

2. Classification of Manifolds under the Correct Tariff Heading:
The Tribunal examined whether the manifolds should be classified under Heading 8707.00 or 7311.00. The original adjudicating authority had visited the factory and found that the manifolds were fabricated bodies fitted on the chassis of motor vehicles, classifiable under 8707.00 and entitled to duty exemption under Notification No. 5/98. The Tribunal agreed with this classification, noting that manifolds are structures mounted on vehicle chassis, not containers for compressed or liquefied gas under Heading 7311.00. The Tribunal referenced Board Circulars dated 13.1.89 and 26.5.89, which clarified that such structures should be classified under 8707.00.

3. Eligibility for Exemption under Notification No. 5/98:
The appellants claimed exemption under Sl.No. 268 of Notification No. 5/98, which exempts goods manufactured in a factory and used within the same factory for building or mounting structures on a motor vehicle chassis. The Tribunal found that the conditions for this exemption were fulfilled, as the original authority had confirmed the use of the manifolds in the factory for mounting on a vehicle chassis. The Tribunal criticized the Commissioner (A) for not adequately addressing why the exemption could not be granted. Therefore, the Tribunal upheld the original authority's decision to extend the exemption.

4. Inclusion of the Value of Gas Cylinders and Other Components in the Assessable Value of Manifolds:
The Tribunal noted that this issue became irrelevant once the exemption under Notification No. 5/98 was granted. However, it referenced the case of JOCIL Ltd. Vs. CCE, where it was held that gas cylinders and manifolds are distinct products, and their values should not be combined. The Tribunal also pointed out that neither the Show Cause Notice nor the Orders-in-Appeal had quantified the duty liability, which was a significant defect. As a result, the Tribunal set aside the Orders-in-Appeal and allowed the appeal with consequential relief.

Conclusion:
The Tribunal allowed the appeals, setting aside the Orders-in-Appeal and restoring the original orders. The appellants were found to have complied with Rule 233B, and the manifolds were correctly classified under 8707.00, entitled to exemption under Notification No. 5/98. The value of gas cylinders and other components was not to be included in the assessable value of the manifolds.

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