1998 (11) TMI 309 - AT - Central Excise

Summary

Issues:
Valuation of ambulance built on duty paid chassis under Notification No. 214/86-C.E., dated 3-4-1986.

Analysis:
The appeals were filed by the Revenue against the order-in-appeal passed by the Collector of Central Excise, Bombay, regarding the valuation of an ambulance built on a duty paid chassis. The Assistant Collector observed that the assessee should declare the value of the entire vehicle as per Section 4, including the chassis value, with only the duty on the chassis to be deducted. However, the Collector of Central Excise set aside this order, stating that body builders should pay duty only on the value they added, i.e., raw materials, manufacturing cost, and profit, referencing a clarification by the Board dated 10-12-1986.

During the hearing, the Revenue's representative argued that duty should be calculated first as per the tariff for the motor vehicle being assessed, with the duty paid on the chassis then deducted. They contended that the duty paid on the chassis should be part of the assessable value of the final vehicle. The respondents' counsel referred to the Board's clarification, stating that chassis value should be excluded for body building by independent body builders, and the job charges collected by body builders already included their profit margin.

Considering Notification No. 241/86-C.E., dated 3-4-1986, which exempted motor vehicles manufactured from duty paid chassis from excise duty, subject to certain conditions, it was clarified that both the value of the chassis and the duty related to it were excludable for determining the net duty liability on the ambulance. This was further supported by the Board's circular dated 10-12-1986, emphasizing that chassis value should be excluded for independent body builders, ensuring no extra duty burden arises.

The Tribunal upheld the Collector of Central Excise's decision, as Notification No. 241/86-CE clearly indicated that duty on the chassis was excludable from the assessable value of the ambulance. The Tribunal found no grounds to disturb the Collector's findings, rejecting the Revenue's appeals. This decision aligned manufacturers availing Modvat credit with those not availing it, ensuring uniform treatment under the notification.