2000 (10) TMI 488 - AT - Central Excise

Summary

Issues Involved:
1. Correct classification of the appellant's product 'Hindustan Drive-away Chassis' (DAC).
2. Applicability of Heading 87.03 vs. Heading 87.06.
3. Interpretation of the term "chassis."
4. Determination of assessable value and re-quantification of demand.

Issue-wise Detailed Analysis:

1. Correct Classification of the Appellant's Product 'Hindustan Drive-away Chassis' (DAC):
The primary issue in the appeal is the classification of the DAC. The appellant argues that the DAC should be classified under Heading 8703.00, which pertains to motor vehicles designed for the transport of persons. Conversely, the Revenue contends that the DAC is merely a chassis fitted with engines and should be classified under Heading 87.06.

2. Applicability of Heading 87.03 vs. Heading 87.06:
The Tribunal examined the two contending entries. Heading 87.03 covers motor vehicles designed for transporting persons, while Heading 87.06 pertains to chassis fitted with engines for motor vehicles of Heading Nos. 87.01 to 87.05. The Tribunal noted that the DAC, as cleared from the appellant's factory, was not a complete motor vehicle since the rear portion of the body was yet to be fabricated. The Tribunal concluded that the DAC could not be classified under Heading 87.03 because it was not a complete motor vehicle and was not designed for the transport of persons in its incomplete state. Instead, it was classifiable under Heading 87.06 as a chassis fitted with engines.

3. Interpretation of the Term "Chassis":
The appellant argued that the DAC was not a chassis in the traditional sense, as it did not have a separate chassis frame and was of mono or unit construction. The Tribunal referred to various authoritative definitions of "chassis" and concluded that the DAC, despite being of modern construction, still performed the functions of a chassis. The Tribunal emphasized that the absence of a separate chassis frame did not convert the DAC into a complete motor vehicle.

4. Determination of Assessable Value and Re-quantification of Demand:
The appellant contended that the differential duty confirmed against them should be deducted from the total realization for determining the assessable value. The Tribunal agreed with this submission, citing the Larger Bench decision in the case of Sri Chakra Tyres Ltd. & Ors. v. CCE. The Tribunal directed the lower authorities to re-quantify the demand accordingly.

Conclusion:
The Tribunal held that the DAC is properly classifiable under Heading 87.06 as a chassis fitted with engines. The appeal was rejected, but the matter was remanded for re-quantification of the demand, taking into account the deduction of the differential duty from the overall realization.