2001 (1) TMI 345 - AT - Central Excise

Summary

Issues: Interpretation of Notfn. No. 239/86 for exemption of motor vehicle parts under Chapter 73.

Analysis:
1. The appeal involved a dispute regarding the interpretation of Notification No. 239/86, which exempts motor vehicles and parts under Chapter 73 of the Central Excise Tariff. The respondent, a manufacturer of steel forgings, claimed the benefit of exemption under this notification for forgings supplied to a vehicle factory. The Assistant Collector denied the exemption, arguing that these forgings were roughly shaped and not directly usable in motor vehicle parts.

2. The Commissioner (Appeals) analyzed the issue and observed that the forgings, although falling under Chapter 73, had reached a stage where with final machining, they would become motor vehicle parts. The Commissioner noted that the legislature intended to extend the benefit of the notification to goods like these forgings, even though further processing was required. The Commissioner held that since the forgings were classified under Chapter 73 and the notification included goods falling under this chapter, the benefit of the notification should be granted.

3. The revenue contended that the goods were not directly usable as motor vehicle parts and argued that if they were indeed motor vehicle parts, they would not fall under Chapter 73. However, the respondents cited previous cases to support their argument that even parts of parts could be considered as parts for the purpose of exemption under the notification.

4. The Tribunal carefully considered the arguments presented. Despite the revenue's claim that some items could not be directly used as motor vehicle parts, no substantiation was provided. Upon reviewing the relevant notification and the Commissioner's order, the Tribunal found no flaws in the decision. The Tribunal agreed with the Commissioner that the forgings were indeed parts classified under Chapter 73, and therefore, the benefit of Notification No. 239/86 could not be denied.

5. Ultimately, the Tribunal upheld the Commissioner's decision, stating that the forgings were rightly classified as parts falling under Chapter 73 and that the benefit of the notification should apply. Since the Commissioner had thoroughly analyzed the issue, the Tribunal saw no reason to interfere with the findings and dismissed the appeal accordingly.